<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13 (e) (1) of the Securities Exchange Act of 1934)
(Amendment No. 1)
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
(Name of Issuer)
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
(Name of Person(s) Filing Statement)
Common Shares of Beneficial Interest, Par Value $.01 per Share
(Title of Class of Securities)
920914-108
(CUSIP Number of Class of Securities)
Ronald A. Nyberg, Esq.
Executive Vice President,
General Counsel and Secretary
Van Kampen American Capital, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(630) 684-6000
(800) 421-5666
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Person(s)
Filing Statement)
Copies to:
Wayne W. Whalen, Esq
Thomas A. Hale, Esq
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
(312) 407-0700
March 20, 1998
(Date Tender Offer First Published,
Sent or Given to Security Holders)
<PAGE> 2
This Amendment No. 1 to the Issuer's Tender Offer Statement on Schedule
13E-4 filed with the Securities and Exchange Commission on March 20, 1998 by
Van Kampen American Capital Prime Rate Income Trust (the "Trust"), with respect
to the tender offer to purchase 48,569,505 of the Trust's outstanding common
shares of beneficial interest, par value $.01 per share, amends such statement
on Schedule 13E-4 to add the following supplemental information: the number of
common shares of beneficial interest of the Trust validly tendered through the
expiration date and not withdrawn was 25,013,316. All 25,013,316 such shares
were purchased in their entirety at the price of $9.96 per share, the net asset
value at the time the offer expired. Payment for the shares was mailed on or
about April 20, 1998. The Schedule 13E-4 is hereby terminated.
Item 9. Material to Be Filed as Exhibits.
The following materials are hereby filed as additional Exhibits to the
Schedule 13E-4:
(a) (6) - Text of Completion Press Release dated
May 1, 1998
(b) - Amended and Restated Credit Agreement with Bank of America
National Trust and Savings Association
<PAGE> 3
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
Dated: May 1, 1998 /s/ Dennis J. McDonnell
Dennis J. McDonnell
President, Chairman of the Board
and Trustee
<PAGE> 4
EXHIBIT INDEX
Exhibit Description
*
(a) (1) (i) Advertisement printed in The Wall Street Journal
*
(a) (1) (ii) Offer to Purchase (including Financial Statements)
(a) (2) Form of Letter of Transmittal (including Guidelines for
*
Certification of Tax Identification Number)
(a) (3) (i) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
*
Companies and Other Nominees
(a) (3) (ii) Form of Letter to Clients of Brokers, Dealers, Commercial
*
Banks, Trust Companies and Other Nominees
*
(a) (3) (iii) Form of Letter to Selling Group Members
*
(a) (3) (iv) Form of Operations Notice
(a) (4) Form of Letter to Shareholders who have requested Offer to
*
Purchase
*
(a) (5) Text of Initial Press Release Dated March 20, 1998
(a) (6) Text of Completion Press Release Dated May 1, 1998
(b) Amended and Restated Credit Agreement with Bank of America
National Trust and Savings Association
*
(c) (1) Investment Advisory Agreement
*
(c) (2) Administration Agreement
*
(c) (3) Offering Agreement
* Previously filed.
<PAGE> 1
EXHIBIT (a) (6)
Text of Press Release Dated May 1, 1998
FOR IMMEDIATE RELEASE CONTACT: Weston B. Wetherell
(630) 684-6360
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
COMPLETES TENDER OFFER FOR ITS COMMON SHARES
OAKBROOK TERRACE, IL, May 1, 1998 -- Van Kampen American Capital
Prime Rate Income Trust announced today the final results of its tender offer
for approximately seven percent of its outstanding common shares of beneficial
interest. The offer expired at 12:00 Midnight, Eastern Standard Time, on
April 17, 1998.
The Trust said that 25,013,316 common shares, or approximately three
and a half percent of the Trust's common shares outstanding as of the
expiration of the tender offer, were validly tendered through the stated
expiration date. All 25,013,316 common shares tendered were purchased at a
price of $9.96 per common share, the net asset value at the time the offer
expired. Payment for the shares purchased was mailed on or about April 20,
1998.
As indicated in the Trust's current prospectus, the Board of Trustees
of the Trust currently intends, each quarter, to consider authorizing the Trust
to make a tender offer for its common shares in order to attempt to provide
liquidity to its investors.
The Trust commenced operations on October 5, 1989 and had total net
assets of approximately $7,096,885,959 as of April 17, 1998.
Van Kampen American Capital Prime Rate Income Trust is advised and
distributed by subsidiaries of Van Kampen American Capital, Inc., a diversified
asset management company with more than two million retail investor accounts,
extensive capabilities for managing institutional portfolios, and more than $60
billion under management or supervision. Van Kampen American Capital's more
than 50 open-end and 38 closed-end funds and more than 2,500 unit investment
trusts are professionally distributed by leading financial advisers nationwide.
Van Kampen American Capital is an indirect wholly-owned subsidiary of Morgan
Stanley Dean Witter & Co.
<PAGE> 1
EXHIBIT (B)
============================================================
CREDIT AGREEMENT
Dated as of April 17, 1997
among
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST,
THE FINANCIAL INSTITUTIONS PARTY HERETO
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent,
Arranged by
BANCAMERICA ROBERTSON STEPHENS
First Amendment and Restatement dated as of April 16, 1998
============================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
I. DEFINITIONS AND INTERPRETATION....................................................1
1.1. Defined Terms.........................................................1
1.2. Interpretation........................................................1
1.3. Accounting Terms......................................................2
II. THE CREDITS......................................................................2
2.1. Amounts and Terms of Commitments......................................2
2.2. Notes.................................................................3
2.3. Procedure for Borrowing...............................................3
2.4. Conversion and Continuation Elections.................................4
2.5. Voluntary Termination or Reduction of Commitments.....................5
2.6. Prepayments...........................................................5
2.7. Repayment.............................................................6
2.8. Interest..............................................................6
2.9. Fees..................................................................7
2.10. Computation of Fees and Interest......................................7
2.11. Payments..............................................................8
2.12. Payments by the Banks to the Agent....................................8
2.13. Sharing of Payments, etc..............................................9
III. TAXES, YIELD PROTECTION AND ILLEGALITY..........................................9
3.1. Taxes.................................................................9
3.2. Illegality...........................................................11
3.3. Increased Costs and Reduction of Return..............................11
3.4. Funding Losses.......................................................12
3.5. Inability to Determine Rates.........................................13
3.6. Certificates of Banks................................................13
3.7. Substitution of Banks................................................13
3.8. Survival.............................................................14
IV. CONDITIONS TO AMENDMENTS AND BORROWING..........................................14
4.1. Conditions to Amendment and Restatement..............................14
4.2. All Borrowings.......................................................15
4.3. Consequences of Effectiveness, etc...................................16
4.4. Reallocation of Loans................................................16
4.5. Amounts Outstanding Under the Original Credit Agreement Deemed
to Be Loans Under This Agreement..................................17
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
V. REPRESENTATIONS AND WARRANTIES...................................................17
5.1. Existence............................................................17
5.2. Authorization........................................................17
5.3. No Conflicts.........................................................17
5.4. Validity and Binding Effect..........................................17
5.5. No Default...........................................................18
5.6. Financial Statements.................................................18
5.7. Litigation...........................................................18
5.8. Liens................................................................18
5.9. Partnerships.........................................................19
5.10. Purpose..............................................................19
5.11. Compliance and Government Approvals..................................19
5.12. Pension and Welfare Plans............................................19
5.13. Taxes................................................................19
5.14. Subsidiaries; Investments............................................19
5.15. Full Disclosure......................................................19
5.16. Investment Policies..................................................20
5.17. Regulations U and X..................................................20
5.18. Status of Loans......................................................20
5.19. Prospectus...........................................................20
5.20. Affiliated Person....................................................20
5.21. Computer Systems.....................................................20
VI. COVENANTS.......................................................................20
6.1. Financial Statements and Other Reports...............................20
6.2. Notices..............................................................22
6.3. Existence............................................................22
6.4. Nature of Business...................................................23
6.5. Books, Records and Access............................................23
6.6. Insurance............................................................23
6.7. Investment Policies and Restrictions.................................23
6.8. Taxes................................................................24
6.9. Compliance...........................................................24
6.10. Pension Plans........................................................24
6.11. Merger, Purchase and Sale............................................24
6.12. Asset Coverage Ratio.................................................25
6.13. Liens................................................................25
6.14. Guaranties...........................................................25
6.15. Other Agreements.....................................................25
6.16. Transactions with Related Parties....................................26
6.17. Other Indebtedness...................................................26
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
6.18. Changes to Organization Documents, etc...............................26
6.19. Proceeds of Loans....................................................26
VII. EVENTS OF DEFAULT..............................................................26
7.1. Events of Default....................................................26
7.2. Remedies.............................................................28
VIII. THE AGENT.....................................................................29
8.1. Appointment and Authorization........................................29
8.2. Delegation of Duties.................................................29
8.3. Liability of Agent...................................................29
8.4. Reliance by Agent....................................................29
8.5. Notice of Default....................................................30
8.6. Credit Decision......................................................30
8.7. Indemnification of Agent.............................................31
8.8. Agent in Individual Capacity.........................................31
8.9. Successor Agent......................................................31
8.10. Withholding Tax......................................................32
IX. MISCELLANEOUS PROVISIONS........................................................33
9.1. Amendments and Waivers...............................................33
9.2. Notices..............................................................34
9.3. No Waiver; Cumulative Remedies.......................................35
9.4. Costs and Expenses...................................................35
9.5. Borrower Indemnification.............................................35
9.6. Payments Set Aside...................................................36
9.7. Successors and Assigns...............................................37
9.8. Confidentiality......................................................38
9.9. Set-off..............................................................39
9.10. Notification of Addresses, Lending Offices, etc......................39
9.11. Counterparts.........................................................39
9.12. Survival.............................................................39
9.13. Disclaimer...........................................................40
9.14. Severability.........................................................40
9.15. No Third Parties Benefited...........................................40
9.16. Governing Law and Jurisdiction.......................................40
9.17. Waiver of Jury Trial.................................................40
9.18. Entire Agreement.....................................................41
9.19. Affiliated Person....................................................41
9.20. Continuing Effectiveness, etc........................................41
9.21. Facsimile Execution..................................................41
</TABLE>
iii
<PAGE> 5
SCHEDULE I Definitions
SCHEDULE II Commitments and Pro Rata Shares
SCHEDULE III Offshore and Domestic Lending Offices, Addresses for Notices
EXHIBIT 2.2 Form of Note
EXHIBIT 2.3 Form of Loan Request
EXHIBIT 2.4 Form of Continuation/Conversion Notice
EXHIBIT 4.1(c)-1 Form of Opinion of Counsel to the Borrower
EXHIBIT 4.1(c)-2 Form of Opinion of Counsel to the Agent
EXHIBIT 5.7-1 Schedule of Litigation
EXHIBIT 5.7-2 Schedule of Contingent Liabilities
EXHIBIT 6.1 Form of Borrowing Base Certificate
vi
<PAGE> 6
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of April 16,
1998 by the parties hereto and amends and restates that certain Credit
Agreement, dated as of April 17, 1997, by and among VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST (the "Borrower"), the various banks (as defined in
Section 2(a)(5) of the Act) party to this Agreement (collectively, the
"Banks"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"),
as agent (in such capacity, the "Agent") for the Banks.
W I T N E S S E T H:
WHEREAS, the Borrower, certain of the Banks and Bank of America National
Trust and Savings Association, as agent for the Banks, have entered into a
Credit Agreement dated as of April 17, 1997 (as originally executed and
delivered, the "Original Agreement"), which provided for the Banks to extend
Loans to the Borrower from time to time; and
WHEREAS, the Borrower and the Banks desire to amend the Original
Agreement, among other things, to increase the aggregate of the Commitments to
$500,000,000, extend the scheduled Commitment Termination Date and to amend the
Original Agreement in certain other respects, all as more fully hereinafter set
forth (the "Refinancing");
NOW, THEREFORE, the parties hereto agree that the Original Agreement shall
be amended and restated, as of the Refinancing Date, upon satisfaction of the
conditions set forth herein, to state in its entirety as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
I.1. Defined Terms. Unless otherwise defined herein, terms defined in
Schedule I have the same respective meanings when used in this Agreement.
I.2. Interpretation. In this Agreement, unless otherwise specified
herein:
(a) the singular number includes the plural number and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if specified herein, only if such successors and assigns are
not prohibited by this Agreement, and reference to a Person in a
particular capacity excludes such Person in
<PAGE> 7
any other capacity or individually;
(c) reference to any gender includes each other gender;
(d) reference to any agreement (including this Agreement), document
or instrument means such agreement, document or instrument as amended,
restated, supplemented or otherwise modified and in effect from time to
time in accordance with the terms thereof and, if specified herein, the
terms hereof and the other Credit Documents and reference to any
promissory note includes any promissory note which is an extension or
renewal thereof or a substitute or replacement therefor;
(e) reference to any applicable law means such applicable law as
amended, modified, codified, replaced or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder, and reference to any section or other provision
of any applicable law means that provision of such applicable law from
time to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section or
other provision;
(f) reference to any Article, Section, Annex, Schedule or Exhibit
means such Article or Section hereof or Annex, Schedule or Exhibit
hereto;
(g) "hereunder", "hereof", "hereto" and words of similar import
shall be deemed references to this Agreement as a whole and not to any
particular Article, Section or other provision hereof;
(h) "including" (and with the correlative meaning "include") means
including without limiting the generality of any description preceding
such term;
(i) "or" is not exclusive; and
(j) relative to the determination of any period of time, "from"
means "from and including" and "to" and "through" mean "to but
excluding".
I.3. Accounting Terms. In this Agreement, unless expressly otherwise
provided, accounting terms shall be construed and interpreted, and accounting
determinations and computations shall be made, in accordance with GAAP in
effect from time to time.
ARTICLE II
THE CREDITS
2
<PAGE> 8
II.1. Amounts and Terms of Commitments. Each Bank severally agrees, on
the terms and conditions set forth herein, to make Loans to the Borrower from
time to time on any Business Day during the period from the Refinancing Date to
the Commitment Termination Date equal to its Pro Rata Share of the aggregate
amount of the Borrowing requested by the Borrower to be made on such day. The
Commitment of each Bank and the outstanding principal amount of Loans made by
each Bank hereunder shall not exceed at any time the aggregate amount set forth
on Schedule II (such amount as the same may be reduced under Section 2.5 or as
a result of one or more assignments as permitted herein pursuant to Section 3.7
and Section 9.7, the Bank's "Commitment"); provided, however, that, after
giving effect to any Borrowing, the aggregate principal amount of all
outstanding Loans shall not at any time exceed the Commitment Amount, and
provided that the aggregate principal amount of all Loans outstanding from time
to time to the Borrower shall not exceed the Borrowing Base for the Borrower.
Within the limits of each Bank's Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.1, repay under
the terms hereof and reborrow under this Section 2.1.
II.2. Notes. The Loans made by each Bank under its Commitment to the
Borrower shall be evidenced by a Note in the form of Exhibit 2.2. Each such
Bank shall record on the schedules annexed to its Note the date, amount and
maturity of each Loan made by it and the amount of each payment of principal
made by the Borrower with respect thereto. Each such Bank is irrevocably
authorized by the Borrower to so record such information on such schedules to
its Note, and each Bank's record shall be rebuttable presumptive evidence;
provided, however, that the failure of a Bank to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations of the Borrower hereunder or under any such Note to such Bank.
Promptly following the Refinancing Date, each Bank that is a party to the
Original Credit Agreement the Commitment of which shall change as of the
Refinancing Date shall return to the Borrower for cancellation any promissory
note issued to it by the Borrower under the Original Credit Agreement and not
theretofore canceled.
II.3. Procedure for Borrowing (a) Each Borrowing shall be made upon
the Borrower's irrevocable written notice or telephonic notice confirmed in
writing within 24 hours delivered to the Agent in the form of a loan request
("Loan Request") substantially in the form of Exhibit 2.3 hereto (which notice
must be received on a Business Day by the Agent prior to 9:00 a.m. (San
Francisco time) (i) three Business Days prior to the requested Borrowing Date,
in the case of Offshore Rate Loans, and (ii) on the Borrowing Date for which a
Loan is requested, in the case of Federal Funds Rate Loans, specifying:
3
<PAGE> 9
(A) the amount of the Borrowing, which shall be in an aggregate
minimum amount of $1,000,000 or any multiple of $1,000,000 in excess
thereof;
(B) the requested Borrowing Date, which shall be a Business
Day;
(C) the Type of Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to such
Loans included in such notice. If the Loan Request fails to specify the
duration of the Interest Period for any Borrowing comprised of Offshore
Rate Loans, such Interest Period shall be two weeks.
In the event that more than one Loan Request is delivered on any Business
Day, the Agent shall, for purposes of ensuring that the aggregate of the
then-outstanding Loans and the Loans which are the subject of the Loan Requests
will not exceed the Commitment Amount, process the Loan Requests in the order
of receipt.
(b) The Agent will promptly notify each Bank of its receipt of any Loan
Request and of the amount of such Bank's Pro Rata Share of that Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Borrower at the Agent's
Payment Office by 11:00 a.m. (San Francisco time) on the Borrowing Date
requested by the Borrower in funds immediately available to the Agent for
deposit to the account which the Agent shall from time to time specify by
notice to the Banks. The proceeds of all such Loans will then be made
available promptly to the Borrower by the Agent in accordance with written
instructions provided to the Agent by the Borrower in like funds as received by
the Agent. No Bank's obligation to make any Loan shall be affected by any
other Bank's failure to make any Loan.
(d) After giving effect to any Borrowing, there may not be more than
three (3) different Interest Periods in effect.
II.4. Conversion and Continuation Elections. (a) The Borrower may, upon
irrevocable written notice or telephonic notice confirmed in writing within 24
hours to the Agent in accordance with Section 2.4(b):
(i) elect, as of any Business Day, in the case of Federal Funds
Rate Loans, or as of the last day of the applicable Interest Period, in
the case of any other Type of Loans, to convert any such Loans (or any
part thereof in an amount that is not less than $1,000,000 or an integral
multiple of $1,000,000 in excess thereof) into Loans of any other Type;
or
4
<PAGE> 10
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Loans having Interest Periods expiring on such
day (or any part thereof in an amount that is not less than $1,000,000 or
an integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced by payment, prepayment or conversion of
part thereof to be less than $1,000,000, such Offshore Rate Loans shall
automatically convert into Federal Funds Rate Loans, and on and after such
date, the right of the Borrower to continue such Loans as, and convert such
Loans into, Offshore Rate Loans shall terminate.
Notwithstanding anything to the contrary, no Loan shall be outstanding for
a period of more than sixty (60) days, and there shall be no more than three
Interest Periods in respect of an Offshore Rate Loan.
(b) The Borrower shall deliver a Conversion/Continuation Notice to be
received by the Agent not later than 9:00 a.m. (San Francisco time) at least
(i) three Business Days in advance of the Conversion/Continuation Date, if the
Loans are to be converted into or continued as Offshore Rate Loans, and (ii) on
the Conversion/Continuation Date, if the Loans are to be continued or converted
into Federal Funds Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or continued;
(C) the Type of Loans resulting from the proposed conversion or
continuation; and
(D) other than in the case of conversions into Federal Funds
Rate Loans, the duration of the requested Interest Period.
(c) The Agent will promptly notify each Bank of its receipt of a
Conversion/Continuation Notice. All conversions and continuations shall be
made ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Bank.
(d) Unless the Majority Banks otherwise agree, during the existence
of a Default, the Borrower may not elect to have a Loan converted into or
continued as an Offshore Rate Loan.
II.5. Voluntary Termination or Reduction of Commitments. The Borrower
may, upon
5
<PAGE> 11
not less than five Business Days' prior written or telephonic notice to the
Agent, terminate the Commitments, or permanently reduce the Commitments by an
aggregate minimum amount of $5,000,000 or any multiple of $1,000,000 in excess
thereof; unless, after giving effect thereto and to any prepayments of Loans
made on the effective date thereof, the then-outstanding principal amount of
the Loans would exceed the amount of the Commitment Amount then in effect.
Once reduced in accordance with this Section, the Commitment Amount may not be
increased. Any reduction of the Commitment Amount shall be applied to each
Bank according to its Pro Rata Share. All accrued commitment fees to but not
including the effective date of any termination of Commitments shall be paid on
the effective date of such termination. All accrued commitment fees to but not
including the effective date of any reduction of Commitments shall be paid on
the last Business Day of the then-current calendar quarter.
II.6. Prepayments. (a) If at any time the outstanding balance of the
Borrower's Indebtedness shall exceed the then-current Borrowing Base of the
Borrower and at such time as there are Loans outstanding to the Borrower, the
Borrower shall immediately prepay the outstanding principal amount of such
Loans in an amount equal to such excess, together with interest accrued thereon
and amounts required under Section 3.4.
(b) Subject to Section 3.4, the Borrower may, at any time or from
time to time, upon not less than three Business Days' irrevocable written or
telephonic notice to the Agent, ratably prepay Loans, in whole or in part, in
minimum amounts of $1,000,000 or any multiple of $1,000,000 in excess thereof.
Such notice of prepayment shall specify the date and amount of such prepayment
and the Type(s) of Loans to be prepaid. If such notice is given, the Borrower
shall make such prepayment to the Agent, and the payment amount specified in
such notice shall be due and payable on the date specified therein, together
with, in the case of the prepayment of Offshore Rate Loans, accrued interest to
each such date on the amount prepaid and any amounts required pursuant to
Section 3.4.
(c) The Agent will promptly notify each Bank of its receipt of any
such notice and of such Bank's Pro Rata Share of such prepayment.
(d) Each prepayment of any Loans pursuant to this Section shall be
without premium or penalty, except as may be required by Section 3.4. No
voluntary prepayment of principal of any Loans shall cause a reduction in the
Commitment Amount.
II.7. Repayment. The Borrower shall repay to the Agent for the benefit
of the Banks on the Commitment Termination Date the aggregate principal amount
of its Loans outstanding on such date.
II.8. Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per
annum equal to the Federal Funds
6
<PAGE> 12
Rate or the Offshore Rate, as the case may be (and subject to the Borrower's
right to convert to another Type of Loans under Section 2.4), plus the
Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Offshore Rate Loans under Section 2.6 for the portion of the Loans so prepaid
and upon payment (including prepayment) in full thereof, and during the
existence of any Event of Default, interest shall be paid on demand of the
Agent at the request or with the consent of the Majority Banks.
Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder or
under any other Credit Document, is not paid in full when due (whether at
stated maturity or by acceleration, demand or otherwise), the Borrower agrees,
to the extent permitted by law, to pay interest on such unpaid principal or
other amount from the date such amount becomes due until the date such amount
is paid in full, and after as well as before any entry of judgment thereon,
payable on demand at a fluctuating rate per annum equal to the Base Rate plus
2%.
(c) Anything herein to the contrary notwithstanding, the obligations
of the Borrower to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Bank would be contrary to the provisions of
any law applicable to such Bank limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank, and in such event
the Borrower shall pay such Bank interest at the highest rate permitted by
applicable law.
II.9. Fees. (a) Arrangement, Agency Fees. The Borrower shall pay an
arrangement fee to the Arranger for the Arranger's own account, and shall pay
agency fees to the Agent for the Agent"s own account, as required by the letter
agreement ("Arrangement Fee Letter") among the Borrower, the Arranger and the
Agent dated February 2, 1998.
(b) Commitment Fees. The Borrower shall pay to the Agent for the
account of each Bank a commitment fee on the daily unused portion of such Bank's
Commitment, computed on a quarterly basis in arrears on the last Business Day
of each calendar quarter based upon the daily utilization for that quarter as
calculated by the Agent, equal to 0.07% per annum. Such commitment fee shall
accrue from the date of this Agreement to the Commitment Termination Date and
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December commencing on June 30, 1998 through the
Commitment Termination Date, with the final payment to be made on the
Commitment Termination Date. All accrued commitment fees to but not including
the effective date of any termination of Commitments shall be paid on the
effective date of such
7
<PAGE> 13
termination. All accrued commitment fees to but not including the effective
date of any reduction of Commitments shall be paid on the last Business Day of
the then-current calendar quarter, with such quarterly payment being calculated
on the basis of the period from such reduction date to such quarterly payment
date. The commitment fees provided in this subsection shall accrue at all
times after the above-mentioned commencement date, including at any time during
which one or more conditions in Article IV are not met.
II.10. Computation of Fees and Interest (a) All computations of interest
on the basis of the Base Rate shall be made on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed. All other computations
of fees and interest shall be made on the basis of a 360-day year and actual
days elapsed (which results in more interest being paid than if computed on the
basis of a 365- or 366-day year). Interest and fees shall accrue during each
period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Borrower and the Banks in the absence of manifest
error. The Agent will, at the request of the Borrower or any Bank, deliver to
the Borrower or Bank, as the case may be, a statement showing the quotations
used by the Agent in determining any interest rate and the resulting interest
rate.
II.11. Payments. (a) All payments to be made by the Borrower shall be
made without set-off, recoupment or counterclaim, subject to Section 3.1.
Except as otherwise expressly provided herein, all such payments shall be made
to the Agent for the account of the Banks at the Agent's Payment Office and
shall be made in Dollars and in immediately available funds no later than
11:00 a.m. (San Francisco time) on the date specified herein. The Agent will
promptly distribute to each Bank its Pro Rata Share (or other applicable share
as expressly provided herein) of such payment in like funds as received. Any
payment received by the Agent later than 11:00 a.m. (San Francisco time) shall
be deemed to have been received on the following Business Day, and any
applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than
a Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Borrower prior to the
date on which any payment is due to the Banks that the Borrower will not make
such payment in full as and when required, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date in immediately
available funds, and the Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Bank on such due date an
8
<PAGE> 14
amount equal to the amount then due such Bank. If and to the extent the
Borrower has not made such payment in full to the Agent, each Bank shall repay
to the Agent on demand such amount distributed to such Bank, together with
interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Bank until the date repaid.
II.12. Payments by the Banks to the Agent (a) Unless the Agent receives
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the date
of such Borrowing, that such Bank will not make available as and when required
hereunder to the Agent for the account of the Borrower the amount of that
Bank's Pro Rata Share of the Borrowing, the Agent may assume that each Bank has
made such amount available to the Agent in immediately available funds on the
Borrowing Date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent any Bank shall not have made its
full amount available to the Agent in immediately available funds and the Agent
in such circumstances has made available to the Borrower such amount, that Bank
shall on the Business Day following such Borrowing Date make such amount
available to the Agent, together with interest at the Federal Funds Rate for
each day during such period. A notice of the Agent submitted to any Bank with
respect to amounts owing under this subsection (a) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the Agent
shall constitute such Bank's Loan on the date of Borrowing for all purposes of
this Agreement. If such amount is not made available to the Agent on the
Business Day following the Borrowing Date, the Agent will notify the Borrower
of such failure to fund, and upon demand by the Agent, the Borrower shall pay
such amount to the Agent for the Agent's account, together with interest
thereon for each day elapsed since the date of such Borrowing, at a rate per
annum equal to the interest rate applicable at the time to the Loans comprising
such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing Date
shall not relieve any other Bank of any obligation hereunder to make a Loan on
such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing
Date.
II.13. Sharing of Payments, etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) in excess of its Pro Rata Share, such Bank shall
immediately (a) notify the Agent of such fact and (b) purchase from the other
Banks such participations in the Loans made by them as shall be necessary to
cause such purchasing Bank to share the excess payment pro rata with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with
9
<PAGE> 15
an amount equal to such paying Bank's ratable share (according to the
proportion of (i) the amount of such paying Bank's required repayment to the
purchasing Bank to (ii) the total amount so recovered from the purchasing Bank)
of any interest or other amount paid or payable by the purchasing Bank in
respect of the total amount so recovered. The Borrower agrees that any Bank so
purchasing a participation from another Bank may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off with respect to such participation) as fully as if such Bank were the
direct creditor of the Borrower in the amount of such participation. The Agent
will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section and will in each
case notify the Banks following any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
III.1. Taxes. (a) Any and all payments by the Borrower to each Bank or
the Agent under this Agreement and any other Credit Document shall be made
free and clear of, and without deduction or withholding for, any Taxes.
In addition, the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each Bank and
the Agent for the full amount of Taxes or Other Taxes in connection with a
payment by it (including any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable by it under this Section) paid by the Bank or the Agent and
any liability (including penalties, interest, additions to tax and expenses
other than penalties, additions to tax, interest and expenses arising solely
as a result of the willful misconduct or gross negligence of such Bank or
Agent) arising therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the Bank or the
Agent makes written demand therefor including with such demand an
identification of the Taxes or Other Taxes (and amounts thereof) with respect
to which such demand for indemnification is being sought.
(c) If the Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under
this Section), such Bank or the Agent, as the case may be, receives an
amount equal to the sum it would have
10
<PAGE> 16
received had no such deductions or withholdings been made;
(ii) the Borrower shall make such deductions and withholdings;
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Borrower shall also pay to the Agent for the account
of such Bank, at the time interest is paid, all additional amounts which
the respective Bank specifies as necessary to preserve the after-tax
yield the Bank would have received if such Taxes or Other Taxes had not
been imposed.
(d) Within 30 days after the date of any payment by the Borrower of
Taxes or Other Taxes, the Borrower shall furnish the Agent the original or a
certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Agent.
(e) If the Borrower is required to pay additional amounts to any Bank
or the Agent pursuant to subsections (b) or (c) of this Section, then such Bank
shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank. The Borrower shall have no obligation to pay any
amounts or increase any amounts payable to any Bank pursuant to this Section
3.1 which are owing on account of such Bank's failure to comply with its
obligations under Section 8.10.
(f) Within 30 days after the written request of the Borrower, each
Bank or Agent shall execute and deliver to the Borrower such certificates or
forms as are reasonably requested by the Borrower in such request, which can be
furnished consistent with the facts and which are necessary to assist the
Borrower in applying for refunds of Taxes or Other Taxes paid or indemnified by
the Borrower hereunder. If a Bank or Agent receives a refund of any Taxes or
Other Taxes with respect to which Borrower has made a payment of additional
amounts, such Bank or Agent shall pay over such refund to the Borrower within
30 days of receipt in an amount not in excess of the payments made by the
Borrower with respect thereto.
11
<PAGE> 17
III.2. Illegality. (a) If any Bank reasonably determines that the
introduction of any Requirement of Law, or any change in any Requirement of
Law, or in the interpretation or administration of any Requirement of Law, has
made it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Bank or its applicable Lending Office to
make Offshore Rate Loans, then, on notice thereof by the Bank to the Borrower
through the Agent, any obligation of that Bank to make Offshore Rate Loans
shall be suspended until the Bank gives notice, and the Bank agrees promptly to
give such notice, to the Agent and the Borrower when the circumstances giving
rise to such determination no longer exist.
(b) If a Bank reasonably determines that it is unlawful to maintain
any Offshore Rate Loan, the Borrower shall, upon its receipt of notice of such
fact and demand from such Bank (with a copy to the Agent), prepay in full such
Offshore Rate Loans of that Bank then outstanding, together with interest
accrued thereon and amounts required under Section 3.4, either on the last day
of the Interest Period thereof, if the Bank may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Offshore Rate Loan, as provided in a notice
from the Bank to the Borrower. If the Borrower is required to so prepay any
Offshore Rate Loan, then concurrently with such prepayment, the Borrower may
borrow from the affected Bank, in the amount of such repayment, a Federal Funds
Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate
Loans has been so terminated or suspended, the Borrower may elect, by giving
notice to the Bank through the Agent, that all Loans which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead Federal Funds Rate
Loans.
(d) Before giving any notice to the Agent under this Section, the
affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise materially disadvantageous to the Bank.
III.3. Increased Costs and Reduction of Return. (a) If any Bank
reasonably determines that, due to the introduction of or any change in or in
the interpretation of any law or regulation or the compliance by that
Bank with any guideline or request made subsequent to the date of this
Agreement from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Bank
(not included in the calculation of the Eurodollar Reserve Percentage) of
agreeing to make or making, funding or maintaining any Offshore Rate Loans,
then the Borrower shall be liable for, and shall from time to time within 30
days after demand (with a copy of such demand to be sent to the Agent) pay to
the Agent, for the account of such Bank, additional amounts as are sufficient
to compensate such Bank for such increased costs.
12
<PAGE> 18
(b) If any Bank shall have reasonably determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration
of any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof or (iv)
compliance by such Bank (or its Lending Office) or any corporation controlling
such Bank with any guideline or request made subsequent to the date hereof with
respect to any Capital Adequacy Regulation affects or would affect the amount
of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank and (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's
desired return on capital) and such Bank determines that, as a result of any of
the foregoing, the amount of such capital is increased as a consequence of its
Commitment, Loans, credits or other obligations under this Agreement, then,
within 30 days after demand therefor accompanied by the certificate
contemplated by Section 3.6 of such Bank to the Borrower through the Agent, the
Borrower shall pay to the Bank, from time to time as specified by the Bank,
additional amounts sufficient to compensate the Bank for any reduced return on
such capital as a result of such increase.
III.4. Funding Losses. The Borrower will reimburse each Bank and hold
each Bank harmless from any loss or expense which the Bank may reasonably
sustain or incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert a Loan
after the Borrower has given (or is deemed to have given) a Loan Request or a
Conversion/Continuation Notice;
(c) the failure of the Borrower to make any prepayment in accordance
with any notice delivered under Section 2.6; or
(d) the prepayment or other payment (including after acceleration
thereof) of an Offshore Rate Loan on a day that is not the last day of the
relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained. For
purposes of calculating amounts payable by the Borrower to the Banks under this
Section and under Section 3.3(b), each Offshore Rate Loan made by a Bank (and
each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the IBOR used in determining the
Offshore
13
<PAGE> 19
Rate for such Offshore Rate Loan by a matching deposit or other borrowing in
the interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Offshore Rate Loan is in fact so funded.
III.5. Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan or that the Offshore Rate applicable pursuant to Section 2.8(a) for any
requested Interest Period with respect to a proposed Offshore Rate Loan does
not adequately and fairly reflect the cost to any Bank of funding such
Loan, the Agent will promptly so notify the Borrower and each Bank.
Thereafter, the obligation of the Banks to make or maintain Offshore Rate Loans
hereunder shall be suspended until the Agent gives notice (and, if appropriate,
the Agent shall give such notice) to the Borrower that adequate and reasonable
means do exist for determining such Offshore Rate or such Offshore Rate does
adequately and fairly reflect the costs to the Banks of funding such Loans.
Upon receipt of such notice, the Borrower may revoke any Loan Request or
Conversion/Continuation Notice then submitted by it. If the Borrower does not
revoke such Notice, the Banks shall make, convert or continue the Loans at the
end of the applicable Interest Period, as proposed by the Borrower, in the
amount specified in the applicable notice submitted by the Borrower, but such
Loans shall be made, converted or continued as Federal Funds Rate Loans instead
of Offshore Rate Loans until the Agent revokes such notice.
III.6. Certificates of Banks. Any Bank claiming reimbursement or
compensation under this Article III shall deliver to the Borrower (with a copy
to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Bank hereunder, and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
14
<PAGE> 20
III.7. Substitution of Banks. Upon the receipt by the Borrower from any
Bank (an "Affected Bank") of a claim for compensation under Section 3.1 or
Section 3.3 or any circumstances exist with respect to such Bank described in
Section 3.2, the Borrower may: (i) request the Affected Bank to use its
best efforts to obtain a replacement bank or financial institution satisfactory
to the Borrower to acquire and assume all or a ratable part of all of such
Affected Bank's Loans and Commitment (a "Replacement Bank"); (ii) request one
or more of the other Banks to acquire and assume all or part of such Affected
Bank's Loans and Commitment (it being understood that no such other Bank shall
in any way be required to effect any such acquisition and assumption); or (iii)
designate a Replacement Bank. Any such designation of a Replacement Bank under
clause (i) or (iii) shall be subject to the prior written consent of the Agent
(which consent shall not be unreasonably withheld) and payment in full of all
amounts due and owing hereunder to the Replacement Bank. Each Bank which is an
Affected Bank agrees to execute the necessary documentation to assign its
interest to a Replacement Bank upon five (5) days' written notice from the
Borrower after a Replacement Bank is identified.
8. Survival. The agreements and obligations of the Borrower in this
Sections 3.1, 3.3 and 3.4 shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS TO AMENDMENTS AND BORROWING
IV.1. Conditions to Amendment and Restatement. This amended and restated
Agreement shall take effect from the first day that the Agent shall have
received counterparts hereof signed by the Borrower, the Agent and the Banks,
and each of the conditions set forth in this Section 4.1 has been waived by
the Agent and each Bank or met.
(a) The Agent shall have received from the Borrower a certificate,
dated the Refinancing Date, of its Secretary or Assistant Secretary as to
(i) resolutions of its board of trustees then in full force and
effect authorizing the execution, delivery and performance of this
amended and restated Agreement, the Notes and each other Credit Document
to be executed by it and the Borrower's Amended and Restated Declaration
of Trust and By-Laws;
(ii) the incumbency and signatures of those of its officers or
agents authorized to act with respect to this amended and restated
Agreement, the Notes and each other Credit Document executed by it;
(iii) the Borrower's valid existence as evidenced by a certificate
issued by
15
<PAGE> 21
the Secretary of State of the Commonwealth of Massachusetts and appended
to the relevant certificate of its Secretary or Assistant Secretary; and
(iv) the fact that the agreements delivered by the Borrower
pursuant to Section 4.1(e) constitute all such agreements between the
Borrower and the Adviser as of such date;
upon which certificate the Agent and each Bank may conclusively rely as to the
matters described in clauses (i) and (ii) until they shall have received a
further certificate from the Borrower canceling or amending such prior
certificate.
(b) The Agent shall have received, for the account of each Bank the
Commitment of which shall change as of the Refinancing Date, a Note of the
Borrower duly executed and delivered by the Borrower and made payable to the
order of such Bank.
(c) The Agent shall have received (1) an opinion, dated the
Refinancing Date and addressed to the Agent and all Banks, from Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Borrower, substantially in the
form of Exhibit 4.1(c)-1 and (2) an opinion, dated the Refinancing Date and
addressed to the Agent and all Banks, from Mayer, Brown & Platt, counsel to the
Agent, substantially in the form of Exhibit 4.1(c)-2
(d) The Agent shall have received evidence of payment of all accrued
and unpaid fees, costs and expenses to the extent then due and payable on the
Refinancing Date, together with Attorney Costs of the Agent to the extent
invoiced prior to or on the Refinancing Date, plus such additional amounts of
Attorney Costs as shall constitute the Agent's reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude final settling of
accounts between the Borrower and the Agent), including any such costs, fees
and expenses then due and payable arising under or referenced in Section 2.9(a)
and those then due and payable pursuant to Section 9.4.
(e) The Agent shall have received copies of each investment advisory
agreement between the Borrower and the Adviser, together with all sub-advisory
agreements, if any in effect as of the Refinancing Date.
(f) The Agent shall have received a Borrowing Base Certificate for
the Borrower completed as of a date that is no more than three Business Days
prior to the Refinancing Date.
(g) The Agent shall have received copies of the most recent
prospectus and statement of additional information for the Borrower in effect
as of the Refinancing Date.
16
<PAGE> 22
IV.2. All Borrowings. The obligation of each Bank to fund any Loan on
the occasion of any Borrowing (including the initial Borrowing) by the Borrower
shall be subject to the satisfaction of each of the conditions precedent set
forth in this Section 4.2.
(a) No Default shall have occurred and be continuing with respect to
the Borrower on such date.
(b) The representations and warranties of the Borrower contained in
Article V (except to the extent such representations and warranties relate
solely to an earlier date, in which case they shall be true and correct as of
such earlier date) shall be true and correct in all material respects on and as
of the date of such Borrowing, both immediately before and after giving effect
to such Borrowing, as if then made.
(c) In the case of a Borrowing, the Agent shall have received a Loan
Request for such Borrowing. Each of the delivery of a Loan Request and the
acceptance by the Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof), the statements made in Sections 4.2(a),
(b), (d) and (e) are true and correct.
(d) Both before and after the Loan in question, the Borrower's Asset
Coverage Ratio shall be at least 8 to 1.
(e) There shall not have been outstanding as of the close of business
(San Francisco time) on the day preceding the proposed Borrowing Date for the
requested Loan a Loan that had been outstanding for more than sixty (60) days.
Any instrument, agreement or other document to be received by the Agent
pursuant to this Article IV, and any other condition precedent required to be
met or satisfied under this Article IV, shall be in form and substance
reasonably satisfactory to the Agent and each Bank and in sufficient copies for
each Bank.
IV.3. Consequences of Effectiveness, etc. On the Refinancing Date the
Original Credit Agreement shall be automatically amended and restated to read
as set forth herein. On and after the Refinancing Date the rights and
obligations of the parties hereto shall be governed by this amended and
restated Agreement; provided that rights and obligations of the parties hereto
with respect to the period prior to the Refinancing Date shall continue to be
governed by the provisions of the Original Credit Agreement. On the
Refinancing Date, the Pro Rata Share of each Bank shall immediately become the
percentage set forth opposite the name of such Bank on Schedule II. With
effect from and including the Refinancing Date, each Person listed on the
17
<PAGE> 23
signature pages hereof that is not a party to the Original Credit Agreement
shall become a party to this Agreement. [Any Bank that is a party to the
Original Credit Agreement whose Pro Rata Share becomes 0% on the occurrence of
the Refinancing shall, upon the occurrence thereof and the reallocation of
Loans pursuant to Section 4.4, cease to be a Bank party to this Agreement, and
all accrued fees and other amounts payable under the Original Credit Agreement
for the account of such Bank shall be due and payable on such date; provided
that the provisions of Sections 3.1, 3.3, 3.4, 9.4 and 9.5 shall continue to
inure to the benefit of each such Bank and each such Bank shall continue to be
subject to and bound by Section 9.8.]
IV.4. Reallocation of Loans. On the occurrence of the Refinancing, (a)
each Bank that, as a result of the adjustment of the Pro Rata Shares, is to
have a greater principal amount of Loans outstanding than such Bank had
outstanding immediately prior to the occurrence of the Refinancing shall, if
requested by the Agent, deliver to the Agent immediately available funds to
cover such Loans (and the Agent shall, to the extent of the funds so received
and the funds received from any Banks that are not parties to the Original
Credit Agreement, disburse funds to each Bank that, as a result of such
adjustment of the Pro Rata Shares, is to have a lesser principal amount
outstanding than such Bank had outstanding under the Original Credit
Agreement), and (b) immediately prior to the Refinancing each Bank that is not
a party to the Original Credit Agreement shall deliver to the Agent immediately
available funds to cover its Loans that will equal such Bank's Pro Rata Share
of the aggregate principal amount outstanding under this Agreement immediately
after the occurrence of the Refinancing.
IV.5. Amounts Outstanding Under the Original Credit Agreement Deemed to
Be Loans Under This Agreement. The principal amounts of Loans owing under the
Original Credit Agreement as at the Refinancing Date to each Bank that is a
party thereto (as reallocated pursuant to this Agreement) shall be deemed to be
Loans made by that Bank hereunder.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks and the Agent to enter into this Agreement
and to make Loans hereunder, the Borrower represents and warrants unto the
Agent and each Bank with respect to itself as set forth in this Article V. The
representations and warranties contained in this Article V shall be deemed to
be repeated each time that the Borrower requests that a Loan be made as
provided in Article IV.
V.1. Existence. The Borrower is a Massachusetts business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. The Borrower is a duly registered,
non-diversified, closed-end investment company under the
18
<PAGE> 24
Act and has registered the sale of its common shares of beneficial interest
under the Securities Act of 1933, as amended, pursuant to one or more
registration statements, including any related prospectus, that is or are
currently effective. The Borrower is in good standing and is duly qualified to
do business in each state where, because of the nature of its activities or
properties, such qualification is required, except where the failure to be so
qualified could not reasonably be expected to have a material adverse effect on
the business or operations of the Borrower.
V.2. Authorization. The Borrower is duly authorized to execute and
deliver this Agreement and the Notes and, so long as this Agreement shall
remain in effect, the Borrower will continue to be duly authorized to borrow
monies hereunder and to perform its obligations under this Agreement and the
Notes.
V.3. No Conflicts. The execution, delivery and performance by the
Borrower of this Agreement and the Notes do not and, so long as this Agreement
shall remain in effect with respect to them, will not (i) conflict with any
provision of law, (ii) conflict with the Trust Agreement or its by-laws, (iii)
conflict with any material agreement or instrument binding upon it, (iv)
conflict with the Borrower's most recent prospectus or its most recent
statement of additional information, (v) conflict with any court or
administrative order or decree applicable to it or (vi) require or result in
the creation or imposition of any Lien on any of its assets.
V.4. Validity and Binding Effect. This Agreement is, and the Notes when
duly executed and delivered will be, the legal, valid and binding obligation of
the Borrower, enforceable against it in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, fraudulent conveyance, fraudulent transfer, moratorium or other
similar laws of general application affecting the enforcement of creditors'
rights or by general principles of equity limiting the availability of
equitable remedies.
V.5. No Default. The Borrower is not in default under any agreement or
instrument to which it is a party or by which any of its respective properties
or assets is bound or affected, other than defaults that could not reasonably
be expected to result in a Material Adverse Change. To the best of its
knowledge, no Default with respect to it has occurred and is continuing.
V.6. Financial Statements. The Borrower's most recent audited Statement
of Assets and Liabilities and its most recent semi-annual asset statement,
copies of which have been or will be furnished to the Banks, have been
prepared in conformity with GAAP applied on a basis consistent with that of the
preceding Fiscal Year or period and present fairly its financial condition as
at such dates and the results of its operations for the periods then ended,
subject
19
<PAGE> 25
(in the case of the interim financial statement) to year-end audit adjustments.
Since the date of its most recent Statement of Assets and Liabilities and such
semi-annual asset statement, there has been no Material Adverse Change.
V.7. Litigation. No claims, litigation, arbitration proceedings or
governmental proceedings that could reasonably be expected to result in a
Material Adverse Change are pending or, to the best of its knowledge, are
threatened against or are affecting the Borrower, except those referred to in
Exhibit 5.7-1. Other than any liability incident to such claims, litigation or
proceedings or provided for or disclosed in the financial statements referred
to in Section 5.6 or listed on Exhibit 5.7-2, to the best of its knowledge, it
has no contingent liabilities which are material to it other than those
incurred in the ordinary course of business.
V.8. Liens. None of the Borrower's property, revenues or assets is
subject to any Lien, except (i) Liens in favor of the Banks, if any,
(ii) Liens for current Taxes not delinquent or Taxes being contested in good
faith and by appropriate proceedings and as to which such reserves or other
appropriate provisions as may be required by GAAP are being maintained, (iii)
Liens as are necessary in connection with a secured letter of credit opened by
or for it in connection with its trustees' and officers' errors and omissions
liability insurance policy, (iv) Liens in connection with the payment of
initial and variation margin in connection with authorized futures and options
transactions and collateral arrangements with respect to options, futures
contracts, options on futures contracts, when-issued or delayed-delivery
securities or other authorized investments, (v) Liens arising under any
custodian agreement to which it is a party, (vi) other Liens on assets with a
value no greater than $2,000,000, and (vii) Liens in connection with reverse
repurchase transactions. Less than 25% of the value (as determined by any
reasonable method) of the assets of the Borrower, not including shares of the
Borrower itself, consists of "margin stock" as defined in FRB Regulation U.
V.9. Partnerships. The Borrower is not a general partner or joint
venturer in any partnership or joint venture.
V.10. Purpose. The proceeds of the Loans will be used by it for
short-term liquidity and other temporary emergency purposes, which purposes are
permitted under the Act and by its prospectus and statement of additional
information. Neither the making of any Loan nor the use of the proceeds
thereof will violate or be inconsistent with the provisions of FRB Regulation
T, U or X. It acknowledges that Loans made to it may be deemed by the FRB to
be "purpose loans" under Regulation U because of its status as an investment
company (or the functional equivalent thereof).
V.11. Compliance and Government Approvals. The Borrower is in compliance
with all statutes and governmental rules and regulations applicable to it,
including, without limitation, the Act, other than incidents of non-compliance
that could not reasonably be
20
<PAGE> 26
expected to result in a Material Adverse Change. No authorization or approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body or other person is required for the due execution, delivery
or performance by the Borrower of this Agreement, the Notes or any of the other
Credit Documents and the Borrowings, other than those which have been obtained
or made.
V.12. Pension and Welfare Plans. The Borrower has not established or
maintained, nor is it liable under, any Plan.
V.13. Taxes. The Borrower has filed all tax returns that are
required to have been filed and has paid, or made adequate provisions for the
payment of, all of its Taxes that are due and payable, except such Taxes, if
any, as are being contested in good faith and by appropriate proceedings and as
to which such reserves or other appropriate provisions as may be required by
GAAP have been maintained. The Borrower is not aware of any proposed
assessment against it for additional Taxes (or any basis for any such
assessment) which might be material in amount to it. The Borrower has
substantially complied with all requirements of the Code applicable to
regulated investment companies so as to be relieved of federal income tax on
net investment income and net capital gains distributed to its shareholders.
V.14. Subsidiaries; Investments. The Borrower has no Subsidiaries or
equity investments or any interest in any other Person other than portfolio
securities (including investment company securities) which may have been
acquired in the ordinary course of business.
V.15. Full Disclosure. No document or instrument furnished by the
Borrower to the Banks in connection herewith contains any untrue statement of
any material fact as of the date when made or omits to state any material fact
necessary to make the statements herein or therein taken as a whole not
misleading as of the date when made in light of the circumstances in which the
same were made.
V.16. Investment Policies. The Borrower's assets are being invested
substantially in accordance with the investment policies and restrictions set
forth in its most recent prospectus and its most recent statement of additional
information other than any de minimis violation of such policies arising in the
ordinary course of business which the Borrower is in the process of correcting.
V.17. Regulations U and X. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock.
V.18. Status of Loans. The Borrower's obligation in connection with the
repayment of any Loans made to it hereunder shall at all times rank at least
pari passu in priority of
21
<PAGE> 27
payment with all of its other present and future unsecured and unsubordinated
Indebtedness.
V.19. Prospectus. The asset coverage restrictions on the Borrower in its
prospectus are not more restrictive than the provisions of Section 6.12 hereof.
V.20. Affiliated Person. To the best of the knowledge of the Borrower
as of the date hereof, it is not an "Affiliated Person" or an "Affiliated
Person" of such an "Affiliated Person", as defined in the Act, of any Bank
party to the Agreement as of the date hereof.
V.21. Computer Systems. The Borrower has developed and implemented a
comprehensive, detailed program to address on a timely basis the "Year 2000
Problem" (that is, the risk that computer applications used by the
Borrower may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999) and reasonably anticipates that it will on a timely basis successfully
resolve the Year 2000 Problem for all material computer applications used by
it. The Borrower believes, based upon inquiry made, that each supplier and
vendor of the Borrower that is of material importance to the financial
well-being of the Borrower will also successfully resolve on a timely basis the
Year 2000 Problem for all of its material computer applications.
ARTICLE VI
COVENANTS
From the date of this Agreement and thereafter until the expiration or
termination of the Commitments and until all Obligations other than those
expressly stated to survive expiration or termination of this Agreement have
been paid or performed in full, the Borrower shall perform the obligations made
applicable to it in this Article VI.
VI.1. Financial Statements and Other Reports. The Borrower shall deliver
to the Agent, with sufficient copies for each Bank:
(a) As soon as available and in any event within 70 days after each
of its Fiscal Years commencing with the Fiscal Year ending July 31, 1997,
a copy of its annual audited Statement of Assets and Liabilities,
including a statement of investments, prepared in conformity with GAAP
and certified by KPMG Peat Marwick or such other independent certified
public accountant who, in the commercially reasonable judgment of the
Majority Banks, shall be satisfactory to the Majority Banks, together
with a certificate from such accountant (i) acknowledging to the Banks
such accountant's understanding that the Banks are relying on such
Statement of Assets and Liabilities, (ii) containing a computation of,
and showing compliance with, the financial ratio contained in Section
6.12 and (iii) to the effect that, in making the examination
22
<PAGE> 28
necessary for the signing of such Statement of Assets and Liabilities,
such accountant has not become aware of any Default that has occurred and
is continuing, or if such accountant has become aware of any such event,
describing it and the steps, if any, being taken to cure it;
(b Within 70 days after the end of the first six months of its
Fiscal Year, a copy of its published semi-annual asset statement,
prepared in conformity with GAAP;
(c Within 15 days after the end of each calendar quarter, (i) a
certificate substantially in the form of Exhibit 6.1 ("Borrowing Base
Certificate") setting forth its (A) borrowing base (as calculated in the
manner contemplated by the form of Borrowing Base Certificate)
("Borrowing Base") and (B) Asset Coverage Ratio as of the last day of
such calendar quarter and (ii) a certificate signed by an Authorized
Officer certifying that, to the best of such Person's knowledge, no
Default has occurred and is continuing or, if an Event of Default has
occurred and is continuing, the steps being taken to remedy the same;
(d (i) Within 15 days following the filing thereof, any
preliminary proxy materials filed with the Securities and Exchange
Commission and (ii) within 15 days after the same become available,
copies of its current prospectus and statement of additional information
(marked to show changes from the prospectus and statement of additional
information most recently delivered to the Banks), except that if its
investment policies are changed materially (including any change in its
ability to borrow hereunder), copies of a revised prospectus (or a
prospectus supplement) and statement of additional information (marked to
show changes from the prospectus (or prospectus supplement) and statement
of additional information most recently delivered to the Banks)
reflecting any such changes shall be provided to the Agent within 15 days
after the same become available; and
(e Promptly from time to time such other reports or information as
any of the Banks may reasonably request.
VI.2. Notices. The Borrower shall notify the Agent in writing of any
of the following immediately upon learning of the occurrence thereof,
describing the same and, if applicable, stating the steps being taken by the
Person(s) affected with respect thereto:
(a the occurrence of a Default;
(b the institution of any litigation, arbitration proceeding or
governmental proceeding which is likely to result in a Material Adverse
Change;
(c the entry of any judgment or decree against it if the aggregate
amount of
23
<PAGE> 29
all judgments and decrees then outstanding against it exceeds the lesser
of 5% of its Net Asset Value or $5,000,000 after deducting (i) the amount
with respect to which it is insured and with respect to which the insurer
has assumed responsibility in writing and (ii) the amount for which it is
otherwise indemnified if the terms of such indemnification and the Person
providing such indemnification are satisfactory to the Majority Banks;
(d the occurrence of a change of its name (whether of its legal
name or a "d/b/a" designation). The Borrower shall promptly execute and
deliver to each Bank a new Note for execution in its new name, together
with such other documents in connection therewith as the Banks shall
reasonably request; and
(e the scheduling of consideration by the board of trustees of the
Borrower of a change in the Borrower's Adviser, distributor,
administrator, custodian (unless such custodian is a Bank) or independent
accountant, or the appointment of any sub-adviser or any Person acting in
a similar capacity to an Adviser; provided that a mailing to shareholders
with respect to any of the foregoing shall not be deemed to be sufficient
notice hereunder.
Notwithstanding anything to the contrary in the foregoing, in the case of
the matters described in subparagraph (e), the notice contemplated by this
Section 6.2 shall be given not later than 30 days prior to the time (i) the
board of trustees of the Borrower is to consider approval of such change or
appointment or otherwise determines to recommend such change or appointment (if
necessary) to the Borrower's shareholders for their approval and (ii) of any
change of the Borrower's custodian; provided, however, if in the case of the
matters contemplated by subparagraph (e) the Borrower could not in good faith
have provided the specified advance notice, such notice shall be given by the
Borrower immediately following the earliest feasible time the notice could have
been provided.
VI.3. Existence. The Borrower, except as specified in Section 6.11(a),
shall maintain and preserve its existence as a registered investment company,
and maintain and preserve all rights, privileges, licenses, copyrights,
trademarks, trade names, franchises and other authority to the extent material
and necessary for the conduct of its business in the ordinary course as
conducted from time to time, unless the Borrower has no Loans outstanding and
the Borrower has irrevocably notified the Agent (which shall thereupon promptly
notify the Banks) that it shall not request any Loans hereunder.
24
<PAGE> 30
VI.4. Nature of Business. The Borrower shall continue in, and limit its
operations to, the business of a closed-end management investment company,
within the meaning of the Act, and maintain in full force and effect at all
times all governmental licenses, registrations, permits and approvals necessary
for the continued conduct of its business, including, without limitation, its
registration with the Securities and Exchange Commission under the Act as a
closed-end investment company, except where the failure to so maintain such
licenses, registrations, permits and approvals would not result in a Material
Adverse Change.
VI.5. Books, Records and Access. The Borrower shall maintain complete
and accurate books and records in which full and correct entries in conformity
with GAAP shall be made of all transactions in relation to its business and
activities; upon reasonable notice, the Borrower shall at the expense of the
Banks prior to Default or at the expense of the Borrower after Default permit
access by the Banks to its books and records during normal business hours and
permit the Banks to make copies of such books and records; provided, that the
Banks agree that Borrower shall not be required to provide the Banks with
access to such of its books and records that are subject to confidentiality
agreements which prohibit such access or which are proprietary in nature.
VI.6. Insurance. The Borrower shall maintain in full force and effect
insurance to such extent and against such liabilities as is commonly
maintained by companies similarly situated, including, but not limited to (i)
such fidelity bond coverage as shall be required by Rule 17g-1 promulgated
under the Act or any similar or successor provision and (ii) errors and
omissions, director and officer liability and other insurance against such
risks and in such amounts (and with such co-insurance and deductibles) as is
usually carried by other companies of comparable size and financial strength
engaged in the same or similar businesses and similarly situated and will, upon
the reasonable request of the Agent, furnish to the Banks a certificate of an
Authorized Officer setting forth the nature and extent of all insurance
maintained by the Borrower in accordance with this Section.
VI.7. Investment Policies and Restrictions. (a) The Borrower, without
prior written notice to the Agent of at least 30 days, shall not rescind, amend
or modify any investment policy described as "fundamental" in any prospectus or
any registration statement(s) that may be on file with the Securities and
Exchange Commission with respect thereto (collectively herein, a "proposed
change"). If, in the reasonable judgment of the Majority Banks, such proposed
change will result in a change in the Banks' analysis of the creditworthiness
of the Borrower, the Agent shall notify the Borrower of such decision;
thereafter, if such proposed change is implemented, the Banks may terminate
their Commitments to lend to the Borrower, and all Loans outstanding
to the Borrower shall become immediately due and payable.
(b The Borrower's investment in any assets shall be made in
accordance with its investment policies and restrictions set forth in its most
recent prospectus and
25
<PAGE> 31
statement of additional information other than any investment which shall
constitute a de minimis violation of such policies arising in the ordinary
course of business which the Borrower is in the process of correcting.
VI.8. Taxes. The Borrower shall pay when due all of its Taxes, unless
and only to the extent that such Taxes are being contested in good faith
and by appropriate proceedings and it shall have set aside on its books such
reserves or other appropriate provisions therefor as may be required by GAAP.
The Borrower shall at all times comply with all requirements of the Code
applicable to regulated investment companies, to such effect as not to be
subject to federal income taxes on net investment income and net capital gains
distributed to its shareholders.
VI.9. Compliance. The Borrower shall comply in all material respects
with all statutes and governmental rules and regulations applicable to it,
including, without limitation, the Act.
VI.10. Pension Plans. The Borrower shall not enter into, or incur any
liability relating to, any Plan.
VI.11. Merger, Purchase and Sale. The Borrower shall not:
(a be a party to any merger or consolidation; provided,
however, that the Borrower may merge or consolidate with any other Person
in accordance with 17 C.F.R. Section 270.17a-8 if (i) such merger or
consolidation complies in all material respects with the requirements of
17 C.F.R. Section 270.17a-8 and all rules promulgated in connection
therewith, (ii) the surviving entity assumes all of the obligations to
the Banks of the Borrower prior to such merger or consolidation and (iii)
in the good faith judgment of the Majority Banks the financial condition
and investment policies and restrictions of the surviving entity are not
fundamentally different from those of the Borrower prior to such merger
or consolidation, unless the Majority Banks otherwise consent;
(b except as permitted by Section 6.11(a) and except for
sales or other dispositions of assets in the ordinary course of its
business or to meet shareholder redemption requests, sell, transfer,
convey, lease or otherwise dispose of all or any substantial part of its
assets; provided, however, that the Borrower may sell substantially all
of its assets to another Person in accordance with 17 C.F.R. Section
270.17a-8 if (i) such sale complies in all material respects with the
requirements of 17 C.F.R. Section 270.17a-8 and all rules promulgated in
connection therewith, (ii) the purchasing entity assumes all obligations
to the Banks of the Borrower prior to such sale and (iii) in the good
faith judgment of the Majority Banks, the financial condition
26
<PAGE> 32
and investment policies and restrictions of the purchasing entity are not
fundamentally different from those of the Borrower prior to the asset
sale; or
(c except as permitted by Section 6.11(a), purchase or
otherwise acquire all or substantially all the assets of any Person
without the review and consent thereto of the Majority Banks, which
consent shall not be unreasonably withheld.
For purposes of this Section 6.11 only, a sale, transfer, conveyance,
lease or other disposition of assets shall be deemed to be a "substantial part"
of the assets of the Borrower only if the value of such assets, when added to
the value of all other assets sold, transferred, conveyed, leased or otherwise
disposed of by the Borrower (other than in the normal course of business or in
a manner otherwise consistent with the Borrower's investment policies and other
than payments or transfers made to satisfy quarterly tenders of shares of the
Borrower) during the same Fiscal Year, exceeds 15% of the Borrower's Total
Assets determined as of the end of the immediately preceding Fiscal Year.
VI.12. Asset Coverage Ratio. The Borrower shall not at any time permit
its Asset Coverage Ratio to be less than 8 to 1 or such other more restrictive
ratio as may be set forth in any prospectus with respect to the Borrower.
VI.13. Liens. The Borrower shall not create or permit to exist any Lien
with respect to any property, revenues or assets now owned or hereafter
acquired by it, except (i) Liens in favor of the Banks, if any, (ii) Liens for
current Taxes not delinquent or Taxes being contested in good faith and by
appropriate proceedings and as to which such reserves or other appropriate
provisions as may be required by GAAP are being maintained, (iii) Liens as are
necessary in connection with a secured letter of credit opened by or on
behalf of the Borrower in connection with the Borrower's trustees' errors and
omissions liability insurance policy, (iv) Liens incurred in the ordinary
course of business in connection with authorized futures and options
transactions and collateral arrangements with respect to options, futures
contracts, options on futures contracts, when-issued or delayed-delivery
securities or other authorized investments, (v) Liens arising under any
custodian agreement to which the Borrower is a party, (vi) Liens in connection
with reverse repurchase agreements and (vii) other Liens on assets with a value
no greater than $2,000,000; provided, however, the value of any of its assets
subject to a Lien shall be excluded from calculation of its Borrowing Base. The
Borrower shall not permit "margin stock" as defined in FRB Regulation U (not
including shares of the Borrower itself) to constitute 25% or more of the value
(as determined by any reasonable method) of the assets of the Borrower.
VI.14. Guaranties. The Borrower shall not become or be a guarantor or
surety of, or otherwise become or be responsible in any manner (whether by
agreement to purchase any obligations, stock, assets, goods or services, or to
supply or advance any funds, assets, goods
27
<PAGE> 33
or services or as an account party under any letter of credit issued in favor
of a third party, or otherwise) with respect to, any undertaking of any other
Person, except for the endorsement, in the ordinary course of collection, of
instruments payable to it or its order.
VI.15. Other Agreements. The Borrower shall not enter into any agreement
containing any provision that would be violated or breached by performance of
its obligations hereunder or under any instrument or document delivered or to
be delivered by it hereunder or in connection herewith.
VI.16. Transactions with Related Parties. The Borrower shall not enter
into or be a party to any transaction or arrangement, including, without
limitation, the purchase, sale, loan, lease or exchange of property or the
rendering of any service, with any Related Party, except in the ordinary course
of and pursuant to the reasonable requirements of its business and upon fair
and reasonable terms no less favorable to it than would be obtainable in a
comparable arm's-length transaction with a Person not a Related Party; provided
that any such transaction must be made in substantial compliance with Section
17 of the Act or an exemption therefrom.
VI.17. Other Indebtedness. The Borrower shall not incur or permit to
exist any Indebtedness, other than (i) the Loans; (ii) unsecured Indebtedness
that is subordinated in right of payment upon liquidation of the Borrower to
the payment of the Loans; (iii) Indebtedness incurred in connection with Liens
permitted by Section 6.13; (iv) reverse repurchase transactions in an amount
not exceeding that permitted by the Borrower's investment policies and
restrictions; and (v) other Indebtedness approved in writing by the Majority
Banks.
VI.18. Changes to Organization Documents, etc. The Borrower shall not
make or permit to be made any material changes to its Organization Documents
without the prior written consent of the Majority Banks.
VI.19. Proceeds of Loans. The Borrower shall utilize the proceeds of
each Loan made to it to provide temporary liquidity funding allowed under the
Act.
ARTICLE VII
EVENTS OF DEFAULT
VII.1. Events of Default. Each of the following shall constitute an
Event of Default with respect to the Borrower under this Agreement:
(a Default in payment by the Borrower (i) when and as
required to be
28
<PAGE> 34
paid herein of any amount of principal of any Loan or (ii) within five
days after the same becomes due of any interest, fee or any other amount
payable hereunder or under any other Credit Document.
(b Default by the Borrower in the payment when due, whether by
acceleration or otherwise (subject to any applicable grace period), of
any Indebtedness of, or guaranteed by, the Borrower in excess of
$5,000,000 (other than the Indebtedness evidenced by the Notes).
(c Any event or condition shall occur that results in the
acceleration of the maturity of any Indebtedness of, or guaranteed by,
the Borrower in excess of $5,000,000 or enables the holder or holders of
such other Indebtedness or any trustee or agent for such holders (any
required notice of default having been given and any applicable grace
period having expired) to accelerate the maturity of such other
Indebtedness.
(d The Borrower (i) becomes insolvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they become
due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in
the ordinary course; (iii) commences any Insolvency Proceeding with
respect to itself; or (iv) takes any action to effectuate or authorize
any of the foregoing.
(e (i) Any involuntary Insolvency Proceeding is commenced or
filed against the Borrower, or any writ, judgment, warrant of attachment,
execution or similar process is issued or levied against a substantial
part of its assets, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60
days after commencement, filing or levy; (ii) the Borrower admits the
material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law)
is ordered in any Insolvency Proceeding; or (iii) it acquiesces in the
appointment of a receiver, trustee, custodian, liquidator, mortgagee in
possession (or agent therefor) or other similar Person for itself or a
substantial part of its property or business.
(f The Borrower shall default in the performance of its
agreement under Section 6.4, 6.11 or 6.12.
(g The Borrower shall default in the performance of its other
agreements herein set forth (and not constituting an Event of Default
under any of the other subsections of this Section 7.1), and such default
shall continue for 30 days (or five Business Days in the case of the
agreement contained in the last sentence of the
29
<PAGE> 35
definition of "Total Assets") after notice thereof to the Borrower from
the Agent.
(h Any representation or warranty made by the Borrower herein,
or in any schedule, statement, report, notice, certificate or other
writing furnished by it on or as of the date as of which the facts set
forth therein are stated or certified, is untrue or misleading in any
material respect when made or deemed made or any certification made or
deemed made by it to the Banks is untrue or misleading in any material
respect on or as of the date made or deemed made.
(i There shall be entered against the Borrower one or more
judgments or decrees which, when taken together, will exceed $5,000,000
at any one time outstanding, excluding those judgments or decrees (i)
that shall have been stayed or discharged within 30 calendar days from
the entry thereof and (ii) those judgments and decrees for and to the
extent which the Borrower is insured and with respect to which the
insurer has assumed responsibility in writing or for and to the extent
which the Borrower is otherwise indemnified if the terms of such
indemnification and the Person providing such indemnification are
satisfactory to the Majority Banks.
(j The Borrower shall no longer be in compliance in all
material respects with all material provisions of the Act after giving
effect to all notice, cure and contest periods thereunder.
(k The Borrower shall violate or take any action that would
result in a violation of any of its investment restrictions or fundamental
investment policies as from time to time in effect, except for violations
or the taking of such actions that could not reasonably be expected to
result in a Material Adverse Change.
(l There occurs a Change in Control of the Borrower's Adviser.
(m The Borrower shall have failed to maintain Van Kampen
American Capital Investment Advisory Corp. or one of its Affiliates as
Adviser to it and the Majority Banks shall not have consented to such
failure.
(n The Borrower shall have changed its distributor, custodian,
accountant or administrator and the Majority Banks shall not have
provided their prior written consent to such change; provided, however,
that the Majority Banks shall not withhold such consent unless, based
upon their reasonable judgment, the Majority Banks in good faith conclude
that such change would result in a change in the creditworthiness of the
Borrower.
VII.2. Remedies. If any Event of Default described in Section 7.1 shall
have occurred
30
<PAGE> 36
and be continuing, the Agent, upon the direction of the Majority Banks, shall
declare the Commitments to be terminated and the Borrower's obligations under
its Notes to be due and payable, whereupon such Commitments shall immediately
terminate with respect to the Borrower and the Borrower's Notes shall become
immediately due and payable, all without advance notice of any kind (except
that if an event described in Section 7.1(d) or Section 7.1(e) occurs, the
Commitments shall immediately terminate with respect to the Borrower and the
obligations under the Notes with respect to the Borrower shall become
immediately due and payable without declaration or advance notice of any kind).
The Agent shall promptly advise the Borrower of any such declaration, but
failure to do so shall not impair the effect of such declaration. If an Event
of Default shall have occurred, the Agent may exercise on behalf of itself and
the Banks all rights and remedies available to it and the Banks against the
Borrower under the Credit Documents or applicable law.
ARTICLE VIII
THE AGENT
VIII.1. Appointment and Authorization. Each Bank hereby irrevocably
(subject to Section 8.9) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each other
Credit Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Credit
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Credit Document, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, nor shall the
Agent have or be deemed to have any fiduciary relationship with any Bank, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Credit Document or
otherwise exist against the Agent.
VIII.2. Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
VIII.3. Liability of Agent. None of the Agent-Related Persons shall (i)
be liable to any of the Banks for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Credit
Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct) or (ii) be responsible in any manner to any
of the Banks for any recital, statement, representation or
31
<PAGE> 37
warranty made by Borrower or any officer or agent thereof contained in this
Agreement or in any other Credit Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Credit Document,
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Credit Document, or for any failure of the Borrower
or any other party to any Credit Document to perform its obligations hereunder
or thereunder. No Agent-Related Person shall be under any obligation to any
Bank to ascertain or to inquire as to the observance or performance of any of
the agreements contained in or conditions of this Agreement or any other Credit
Document or to inspect the properties, books or records of the Borrower.
VIII.4. Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement, or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Credit Document
unless it shall first receive such advice or concurrence of the Majority Banks
as it deems appropriate, and if it so requests, it shall first be indemnified
to its satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Credit Document in
accordance with a request or consent of the Majority Banks and such request,
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Banks.
VIII.5. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a "notice of default".
The Agent will notify the Banks of its receipt of any such notice. The Agent
shall take such action with respect to such Default as may be requested by the
Majority Banks in accordance with Article VII; provided, however, that unless
and until the Agent has received any such request, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action,
with respect to such Default as it shall deem advisable or in the best
interest of the Banks.
VIII.6. Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it and that
no act by the Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any
32
<PAGE> 38
representation or warranty by any Agent-Related Person to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition, and
creditworthiness of the Borrower, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to the Borrower hereunder. Each
Bank also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Credit Documents and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition, and creditworthiness of the Borrower. Except
for notices, reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition, or creditworthiness of the Borrower which may come into the
possession of any of the Agent-Related Persons.
VIII.7. Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
that no Bank shall be liable for the payment to the Agent-Related Persons of
any portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Credit Document, or any
document contemplated by or referred to herein, to the extent that the Agent is
not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
VIII.8. Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Borrower and
their Affiliates as though BofA were not the Agent hereunder and without notice
to or consent of the Banks. The Banks acknowledge that, pursuant to such
activities, BofA or its Affiliates may receive information regarding the
Borrower or their
33
<PAGE> 39
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Borrower) and acknowledge that the Agent shall be
under no obligation to provide such information to them. With respect to its
Loans, BofA shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it were not the Agent, and the
terms "Bank" and "Banks" include BofA in its individual capacity.
VIII.9. Successor Agent. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon 30 days' notice to the Banks and the
Borrower. If the Agent resigns under this Agreement, the Majority Banks
shall appoint from among the Banks a successor agent for the Banks, which
successor agent shall be subject to approval by the Borrower. If no successor
agent is appointed prior to the effective date of the resignation of the Agent,
the Agent may appoint, after consulting with the Banks and the Borrower, a
successor agent from among the Banks. Upon the acceptance of its appointment
as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Agent and the term "Agent" shall mean
such successor agent, and the retiring Agent's appointment, powers and duties
as Agent shall be terminated. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article VIII and Sections 9.4 and 9.5 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective, and the Banks shall perform all of the duties of
the Agent hereunder until such time, if any, as the Majority Banks appoint a
successor agent as provided for above.
VIII.10. Withholding Tax. (a) On or prior to the date of execution and
delivery of this Agreement in the case of each initial Bank, and on or prior to
the date of the assignment pursuant to which it becomes a party to this
Agreement in the case of an assignee Bank, and from time to time thereafter if
requested by the Agent or Borrower, any Bank that is a "foreign corporation,
partnership or trust" within the meaning of the Code agrees with and in favor
of the Agent and the Borrower to deliver to the Agent and the Borrower IRS Form
1001 and IRS Form W-8, two copies of IRS Form 4224, as appropriate, or any
successor form or forms as may be required under the Code or other laws of the
United States as a condition to exemption from, or reduction of, United States
withholding tax.
A Bank providing IRS Forms 1001 and W-8 shall also provide to the Agent
and Borrower properly completed IRS Forms 1001 and W-8 in each third succeeding
calendar year during which interest may be paid under this Agreement. A Bank
providing IRS Form 4224 shall also provide to the Agent and Borrower two
properly completed IRS Forms 4224 before the payment of interest is due in each
succeeding taxable year of such Bank during which interest may be paid under
this Agreement.
34
<PAGE> 40
Such Bank agrees to promptly notify the Agent and the Borrower of any change in
circumstances that would modify or render invalid any claimed exemption or
reduction. If the IRS form provided by a Bank at the time such Bank first
becomes a party to this Agreement indicates a United States withholding tax in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes and Other Taxes unless and until such Bank provides the appropriate form
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes and Other Taxes for the
period governed by such form; provided, however, that, if at the date of an
assignment pursuant to which an assignee becomes a party to this Agreement, the
Bank assignor was entitled to payments under Section 3.1 in respect of United
States withholding tax with respect to interest paid at such date, then, to
such extent, the term Taxes shall include United States withholding tax, if
any, applicable with respect to the Bank assignee on such date. For any period
with respect to which a Bank that is a "foreign corporation, partnership or
trust" within the meaning of the Code has failed to provide the Agent and
Borrower with the appropriate IRS forms described above (other than if such
failure is due to a change in law occurring subsequent to the date on which a
Bank, or an assignee thereof, becomes a party to this Agreement), such Bank
shall not be entitled to indemnification under Section 3.1 with respect to
withholding taxes imposed by the United States; provided, however, that should
a Bank become subject to withholding taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as the Bank shall
reasonably request to assist the Bank to recover such Taxes.
(b If any Bank claims exemption from or reduction of withholding tax
under a United States tax treaty by providing IRS Form 1001 and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part
of the Obligations of the Borrower to such Bank, such Bank agrees to notify the
Agent and the Borrower of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Borrower to such Bank. To the extent of
such percentage amount, the Agent and the Borrower will treat such Bank's IRS
Form 1001 as no longer valid.
(c If any Bank claiming exemption from United States withholding tax by
filing IRS Form 4224 with the Agent sells, assigns, grants a participation in,
or otherwise transfers all or part of the Obligations of the Borrower to such
Bank, such Bank agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d If the IRS or any other Governmental Authority of the United States
or other jurisdiction asserts a claim that the Agent or the Borrower did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered, was not properly executed, or
because such Bank failed to notify the Agent or the Borrower of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), such Bank shall indemnify the Agent
and
35
<PAGE> 41
the Borrower fully for all amounts paid, directly or indirectly, by the Agent
or the Borrower as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Agent or the Borrower under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Banks under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Agent.
ARTICLE IX
MISCELLANEOUS PROVISIONS
IX.1. Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Credit Document, and no consent with respect to
any departure by the Borrower therefrom, shall be effective unless the same
shall be in writing and signed by the Majority Banks (or by the Agent at the
written request of the Majority Banks) and the Borrower and acknowledged by the
Agent, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing
and signed by all the Banks and the Borrower and acknowledged by the Agent, do
any of the following:
(a increase or extend the Commitments of any Bank (or reinstate
any Commitment(s) terminated pursuant to Section 7.1);
(b postpone or delay any date fixed by this Agreement or any
other Credit Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other Credit
Document;
(c reduce the principal of, or the rate of interest specified
herein on, any Loan, or (subject to clause (ii) below) any fees or other
amounts payable hereunder or under any other Credit Document;
(d change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any of
them to take any action hereunder; or
(e amend this Section, Section 2.13, Section 6.12, the
definition of "Asset Coverage Ratio" (or any defined term as it is used in such
definition) or any provision herein providing for consent or other action by
all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless
in writing and
36
<PAGE> 42
signed by the Agent in addition to the Majority Banks or all the Banks, as the
case may be, affect the rights or duties of the Agent under this Agreement or
any other Credit Document and (ii) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed by the parties thereto.
IX.2. Notices. (a) All notices, requests and other communications
shall be in writing (including, unless the context expressly otherwise
provides, by facsimile transmission, provided that any matter transmitted by
the Borrower by facsimile (i) shall be immediately confirmed by a telephone
call to the recipient at the number specified on Schedule III and (ii) shall be
followed promptly by delivery of a hard copy original thereof) and mailed by
certified mail return receipt requested postage prepaid, faxed or delivered to
the address or facsimile number specified for notices on Schedule III, or, as
directed to the Borrower or the Agent, to such other address as shall be
designated by such party in a written notice to the other parties, and as
directed to any other party, at such other address as shall be designated by
such party in a written notice to the Borrower and the Agent.
(b All such notices, requests and communications shall, when
transmitted by overnight delivery or faxed, be effective when delivered for
overnight (next-day) delivery or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail by certified mail return receipt requested, or if
delivered, upon delivery; provided that notices pursuant to Article II or VIII
shall not be effective until actually received by the Agent.
(c Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Borrower. The Agent and the Banks shall be entitled to rely
on the authority of any Person purporting to be a Person authorized by the
Borrower to give such notice, and the Agent and the Banks shall not have any
liability to the Borrower or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Borrower to repay the Loans shall not be
affected in any way or to any extent by any failure by the Agent and the Banks
to receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
IX.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Bank, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.
37
<PAGE> 43
IX.4. Costs and Expenses. The Borrower shall:
(a whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (so long as it is the Agent, or if BofA is
not the Agent, the Bank acting as successor Agent) (including in its capacity
as Agent) within five Business Days after demand for all reasonable costs and
expenses incurred by BofA (so long as it is the Agent, or if BofA is not the
Agent, the Bank acting as successor Agent) (including in its capacity as Agent)
in connection with the preparation, delivery, administration and execution of,
and any amendment, supplement, waiver or modification to (in each case, whether
or not consummated), this Agreement, any Credit Document and any other
documents prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including reasonable
Attorney Costs incurred by BofA (so long as it is the Agent, or if BofA is not
the Agent, the Bank acting as successor Agent) (including in its capacity as
Agent) with respect thereto; provided, however, notwithstanding anything to the
contrary in the foregoing, the responsibility of the Borrower to reimburse BofA
(so long as it is the Agent, or if BofA is not the Agent, the Bank acting as
successor Agent) for Attorney Costs in connection with the development,
preparation, delivery and execution of this amended and restated Agreement and
such other documents and the consummation of such transactions shall be limited
to the reasonable fees and disbursements of outside counsel to BofA (so long as
it is the Agent, or if BofA is not the Agent, the Bank acting as successor
Agent); and
(b pay or reimburse the Agent, the Arranger and each Bank
within five Business Days after demand for all costs and expenses (including
Attorney Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Credit Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans and including in any Insolvency Proceeding or
appellate proceeding).
IX.5. Borrower Indemnification. (a Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold the
Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person"), harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including reasonable Attorney Costs) of
any kind or nature whatsoever which may at any time (including at any time
following repayment of the Loans and the termination, resignation or
replacement of the Agent or replacement of any Bank) be imposed on, incurred by
or asserted against any such Person in any way relating to or arising out of
this Agreement or any Credit Document, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including with respect to any investigation, litigation
or proceeding (including any
38
<PAGE> 44
Insolvency Proceeding or appellate proceeding) related to or arising out of
this Agreement or the Loans or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided that the Borrower shall not have an
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Section shall survive payment of
all other Obligations.
(b Promptly after receipt by an Indemnified Person under
subsection (a) above of notice of the commencement of any action, such
Indemnified Person shall, if a claim in respect thereof is to be made against
the Borrower under such subsection, notify the Borrower in writing of the
commencement thereof, but the omission so to notify the Borrower shall not
relieve it from any liability which it may have to any Indemnified Person
otherwise than under such subsection. In case any such action shall be
brought against any Indemnified Person and it shall notify the Borrower of the
commencement thereof, the Borrower shall be entitled to participate therein
and, to assume the defense thereof, with counsel reasonably satisfactory to
such Indemnified Person (who shall not, except with the consent of the
Indemnified Person, be counsel to the Borrower), and after notice from the
Borrower to such Indemnified Person of its election so to assume the defense
thereof; provided that in no event shall any settlement or compromise of any
such claims, actions or demands be made without the consent of the Indemnified
Person, the consent of which shall not be unreasonably withheld; and provided,
further, that the Borrower shall not be required to reimburse the expenses of
more than one counsel in any jurisdiction unless the Indemnified Parties shall
determine in their sole discretion that their interests may differ.
(c The agreements in this Section 9.5 shall survive payment of
all other Obligations.
IX.6. Payments Set Aside. To the extent that the Borrower makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Bank in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred and (b) each Bank severally agrees to pay to the
Agent upon demand its pro rata share of any amount so recovered from or repaid
by the Agent.
IX.7. Successors and Assigns (a) The provisions of this Agreement shall
be binding upon and shall inure to the benefit of the Borrower, the Agent and
the Banks and their
39
<PAGE> 45
respective successors and assigns, except that Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of the Banks; provided that the Banks hereby agree that (i)
they each consent to any transfer or assignment made to another Person pursuant
to Section 6.11(b) (the "New Borrower") so long as all of the conditions in
the proviso in Section 6.11(b) are met; (ii) the Banks further agree they will
enter into all amendments and waivers to this Agreement to accommodate the New
Borrower and its structure and to waive any Default and other provisions of
this Agreement in connection with any such assignment or transfer; (iii) the
Banks further agree that any transfer or assignment made pursuant to Section
6.11(b) shall not itself be deemed to be a rescission, amendment or
modification of any "fundamental" investment policy under Section 6.7(a) or a
violation of Section 6.7(b); and (iv) the Banks agree to release the original
Borrower from all liability hereunder.
(b) The Loans are being made by the Banks in the ordinary course
of their business and not with a view toward distribution, it being understood
that each Bank may sell participations and assignments in its Commitments and
the Loans as provided herein. Any Bank may at any time assign, subject to the
Borrower's consent, which consent shall not be unreasonably withheld, to one or
more financial institutions (each of which shall have a net worth of at least
$500,000,000 (or the equivalent thereof in another currency)) not an affiliate
(as defined in the Act) of or an affiliate (as defined in the Act) of such an
affiliate of the Borrower or Van Kampen American Capital Investment Advisory
Corp. (each an "Assignee") all, or a proportionate part of all, of its rights
under this Agreement and the Borrower's Notes in a minimum amount of
$25,000,000; provided that the Borrower may continue to deal solely and
directly with the Bank in connection with any interest assigned until the
Borrower receives written notice of assignment, the address of the assignee and
the Borrower consents. Any Bank may at any time grant to one or more financial
institutions (each of which shall have a net worth of at least $500,000,000 (or
the equivalent thereof in another currency)) not an affiliate (as defined in
the Act) of the Borrower or Van Kampen American Capital Investment Advisory
Corp. (each a "Participant") participating interests in its Commitments or any
or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower, such Bank shall remain responsible for the performance of its
obligations hereunder, and the Borrower shall continue to deal solely and
directly with such Bank in connection with the Bank's rights and obligations
under this Agreement. Any agreement pursuant to which such Bank may grant such
a participating interest shall provide that the Bank shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder,
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement (i) which increases or decreases the
Commitments of the Bank, (ii) reduces the principal of or rate of interest on
any Loan or fees hereunder or (iii) postpones the date fixed for any payment of
principal of or interest on any Loan or any fees
40
<PAGE> 46
hereunder without the consent of the Participant. The Borrower agrees that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Article III hereof with respect to its
participating interest subject to clause (d) below and subject to compliance
with Section 8.10 by the participant as if it were a Bank.
(c) Any Bank may at any time assign all or any portion of its
rights under this Agreement and the Notes to a Federal Reserve Bank. No such
assignment shall release such Bank from its obligations hereunder.
(d) No Assignee, Participant or other transferee of a Bank's
rights shall be entitled to receive any greater payment under Section 3.1 and
Section 3.3 hereof than such Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or at a time when the circumstances giving
rise to such greater payment did not exist.
IX.8. Confidentiality. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise
due care to maintain the confidentiality of all written information identified
as "confidential" or "secret" by the Borrower and provided to it by or on
behalf of the Borrower, or by the Agent on the Borrower's behalf, under this
Agreement or any other Credit Document, and neither it nor any of its
Affiliates shall use any such information other than in connection with or in
enforcement of this Agreement and the other Credit Documents, except to the
extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Bank or (ii) was or becomes
available on a non-confidential basis from a source other than the Borrower,
provided that such source is not bound by a confidentiality agreement with the
Borrower known to the Bank; provided, however, that any Bank may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other legal process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent,
any Bank or their respective Affiliates may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Credit Document; (F) to such Bank's independent auditors and
other professional advisors; (G) to any Participant or Assignee, actual or
potential, provided that such Person agrees in writing to keep such information
confidential to the same extent as required by the Banks hereunder; (H) as to
any Bank or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Borrower is party
or is deemed party with such Bank or such Affiliate; and (I) to its Affiliates;
provided that each Bank shall require its Affiliates to agree to comply with
the provisions of Section 9.9; and provided further that in the case of clauses
(B), (C) and (D), such Bank shall use reasonable efforts to notify the Borrower
promptly of any requests to disclose such
41
<PAGE> 47
information so that the Borrower may seek a protective order or other
appropriate remedy.
IX.9. Set-off. (a) In addition to any rights and remedies of the Banks
provided by law, but subject to Section 9.9(b), if, as to the Borrower, an
Event of Default exists and is continuing or the Loans have been accelerated,
each Bank is authorized at any time and from time to time, without prior notice
to the Borrower (any such notice being waived by the Borrower to the fullest
extent permitted by law), to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the
account of the Borrower against any and all Obligations owing to such Bank, now
or hereafter existing, irrespective of whether or not the Agent or such Bank
shall have made demand under this Agreement or any Credit Document and although
such Obligations may be contingent or unmatured provided that any such
appropriation and application shall be subject to the provisions of Section
2.13. Each Bank agrees promptly to notify the Borrower and the Agent after any
such set-off and application made by such Bank; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.
(b) Notwithstanding the foregoing, in no event shall any Bank
have any right to set off or otherwise apply any deposits of any kind at any
time held by any such Bank to the extent that such Bank holds such deposits as
the Borrower's custodian or agent. Without limiting the foregoing, in no event
shall State Street Bank and Trust Company set off or otherwise apply any
deposits of any kind at any time held by State Street Bank and Trust Company
pursuant to that certain Custodian Contract between the Borrower and State
Street Bank and Trust Company as in effect on the date hereof and as the same
may be amended, restated, supplemented or otherwise modified from time to time.
IX.10. Notification of Addresses, Lending Offices, etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
IX.11. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
IX.12. Survival. The obligations of the Borrower under Sections 2.9,
3.1, 3.3, 3.4 and Sections 9.4 and 9.5, and the obligations of the Banks under
Sections 8.7 and 9.8, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Commitments. The representations and warranties made by the Borrower in this
Agreement and in each other Credit Document shall survive the execution
42
<PAGE> 48
and delivery of this Agreement and each such other Credit Document.
IX.13. Disclaimer. None of the shareholders, trustees, officers,
employees and other agents of the Borrower shall be personally bound by or
liable for any indebtedness, liability or obligation hereunder or under the
Notes, nor shall resort be had to their private property for the satisfaction
of any obligation or claim hereunder.
IX.14. Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not
in any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
IX.15. No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Borrower, the Banks, the
Agent and the Agent-Related Persons, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary
of, or have any direct or indirect cause of action or claim in connection with,
this Agreement or any of the other Credit Documents.
IX.16. Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
ILLINOIS; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT AGAINST THE BORROWER IN
THE COURTS OF THE STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY ILLINOIS LAW.
IX.17. Waiver of Jury Trial. THE BORROWER, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
CREDIT DOCUMENTS, OR THE TRANSACTIONS
43
<PAGE> 49
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION
OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS OR OTHERWISE. THE BORROWER, THE BANKS AND THE AGENT
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE
THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER CREDIT DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS.
IX.18. Entire Agreement. This Agreement, togetherwith the other Credit
Documents, embodies the entire agreement and understanding among the Borrower,
the Banks and the Agent and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
IX.19. Affiliated Person. Each Bank represents that it is not
an"Affiliated Person" or an "Affiliated Person" of such an "Affiliated Person",
as defined in the Act, of the Borrower.
IX.20. Continuing Effectiveness, etc. After the Refinancing Date, all
references in the Credit Documents or other similar documents to "Credit
Agreement" or words of like import shall refer to this Agreement. The
execution, delivery and effectiveness of this Agreement shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
the Banks under any of the other Credit Documents, nor constitute a waiver of
any provision of the Credit Documents.
IX.21. Facsimile Execution. One or more executed counterparts of this
Agreement or any document or instrument related hereto may be delivered by
facsimile, with the intention that such counterparts have the same effect as an
original executed counterpart hereof or thereof. Any party hereto delivering an
executed counterpart of this Agreement or any related document or instrument by
facsimile, shall promptly provide an original of such executed counterpart to
the Agent.
[Balance of page left blank intentionally.]
44
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By: /s/ Edward C. Wood, III
-------------------------------
Title: Vice President & CFO
----------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: /s/ John G. Hayes
-------------------------------
Title: Vice President
----------------------------
S-1
<PAGE> 51
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ John G. Hayes
-------------------------------
Title: Vice President
----------------------------
THE BANK OF NEW YORK
By: /s/ Scott H. Buitekant
-------------------------------
Title: Asst. Vice President
----------------------------
BAYERISCHE HYPOTHEKEN-UND WECHSEL-
BANK AKTIENGESELLSCHAFT, New York branch
By: /s/ David A. Rockwell
-------------------------------
Title: Sr. Vice President
----------------------------
By: /s/ Constance Madden
-------------------------------
Title: Vice President
----------------------------
FLEET NATIONAL BANK
By: /s/ Leonard Lapolice
-------------------------------
Title: Asst. Vice President
----------------------------
S-2
<PAGE> 52
STATE STREET BANK AND TRUST COMPANY
By: /s/ Edward A. Siegel
-------------------------------
Title: Asst. Vice President
----------------------------
CITIBANK, N.A.
By: /s/ Jervis Smith
-------------------------------
Title: Attorney-in-fact
----------------------------
COMMERZBANK AKTIENGESELLSCHAFT, NEW
YORK BRANCH
By: /s/ William M. Earley
-------------------------------
Title: Vice President
----------------------------
By: /s/ Joseph J. Hayes
-------------------------------
Title: Asst. Vice President
----------------------------
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Reanud d'Merbes
-------------------------------
Title: Sr. Vice President
----------------------------
HARRIS TRUST AND SAVINGS BANK
By: /s/ Scott Harris
-------------------------------
Title: Vice President
----------------------------
S-3
<PAGE> 53
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By: /s/ Edward J. Meyer Jr.
-------------------------------
Title: Vice President
----------------------------
S-4
<PAGE> 54
SCHEDULE I
Definitions
"Act" means the Investment Company Act of 1940.
"Adviser" means Van Kampen American Capital Investment Advisory Corp., a
Delaware corporation or any of its wholly-owned Subsidiaries as investment
adviser, sub-adviser or administrator to the Borrower.
"Affected Bank" is defined in Section 3.7.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.
"Agent" is defined in the preamble and includes each other Person as shall
have subsequently been appointed as the successor Agent pursuant to Section
8.9.
"Agent-Related Persons" means BofA and any successor agent arising under
Section 8.9, together with their respective Affiliates (including, in the case
of BofA, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on
Schedule III in relation to the Agent or such other address as the Agent may
from time to time specify.
"Agreement" means this Credit Agreement.
"Applicable Margin" means,
(i) with respect to Federal Funds Rate Loans, 0.375%; provided,
however, that during any period the aggregate outstanding Loans exceed
$250,000,000.00, the Applicable Margin shall be 0.500% for such period;
and
I-1
<PAGE> 55
(ii) with respect to Offshore Rate Loans, 0.375%; provided,
however, that during any period the aggregate outstanding Loans exceed
$250,000,000.00, the Applicable Margin shall be 0.500% for such period.
"Arrangement Fee" is defined in Section 2.9.
"Arranger" means BancAmerica Robertson Stephens, a Delaware corporation.
"Asset Coverage Ratio" means, with respect to the Borrower, the ratio
which the Net Asset Value of the Borrower, less the value of assets subject to
Liens, bears to the aggregate amount of Indebtedness of the Borrower.
"Assignee" is defined in Section 9.7(b).
"Attorney Costs" means and includes any and all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost of
internal legal services and all reasonable disbursements of internal counsel.
"Authorized Officer" means, relative to the Borrower, those of its
officers or agents whose signatures and incumbency shall have been certified to
the Agent and the Banks pursuant to Section 4.1(a).
"Banks" is defined in the preamble.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978.
"Base Rate" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." The "reference rate" is a rate set by
BofA based upon various factors, including BofA's costs and desired return,
general economic conditions and other factors and is used as a reference point
for pricing some loans, which may be priced at, above or below such announced
rate. Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"BofA" is defined in the preamble.
"Borrower" means Van Kampen American Capital Prime Rate Income Trust and
its successors and assigns permitted pursuant to Section 9.7(a).
"Borrowing" means a borrowing hereunder consisting of Loans of the same
Type made to the Borrower on the same day by the Banks under Article II and,
other than in the case of Federal Funds Rate Loans, having the same Interest
Period.
I-2
<PAGE> 56
"Borrowing Base" has the meaning set forth in Section 6.1(c).
"Borrowing Base Certificate" means a Borrowing Base Certificate as defined
in Section 6.1(c) and substantially in the form of Exhibit 6.1 attached hereto.
"Borrowing Date" means any date on which a Borrowing occurs under Section
2.3.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in Chicago, New York City or San Francisco are
authorized or required by law to close and, if the applicable Business Day
relates to any Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capitalized Lease" means any lease which is or should be capitalized on
the balance sheet of the lessee in accordance with GAAP.
"Change in Control" means with respect to any Person any transaction or
series of transactions where (i) any "person" (as such term is used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") as in effect on the date hereof) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act, as in effect on the date
hereof), directly or indirectly, of securities of such Person (the "Target")
representing 20% or more of the combined voting power of the Target's
then-outstanding securities; (ii) at any time less than a majority of the
members of the Target's board of directors shall be persons who were either
nominated for election or were elected by such board of directors; (iii) the
Target's stockholders approve a merger or consolidation of the Target with
any other Person, other than a merger or consolidation that would result in
the voting securities of the Target outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 75% of the
combined voting power of the voting securities of the Target or such
surviving entity outstanding immediately after such merger or consolidation;
or (iv) the Target's stockholders approve a plan of complete liquidation of
the Target or an agreement for the sale or disposition of all or
substantially all of the Target's assets; provided that no merger between
Morgan Stanley Group, Inc. and Dean Witter, Discover & Co. shall be deemed a
"Change in Control".
"Closing Date" means April 17, 1997.
"Code" means the Internal Revenue Code of 1986.
I-3
<PAGE> 57
"Commitment" means, relative to any Bank, such Bank's obligation to make
Loans pursuant to Section 2.1.
"Commitment Amount" means, on any date, $500,000,000, as such amount may
be reduced from time to time pursuant to Section 2.5.
"Commitment Termination Date" means the earliest to occur of:
(a) April 15, 1999;
(b) the date on which the Commitments terminate in accordance with
the provisions of this Agreement; and
(c) the date on which any Event of Default described in Section
7.1(e) or Section 7.1(f) occurs.
Upon the occurrence of any event described in clause (b) or (c) above, the
Commitments shall terminate automatically and without further action.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit 2.4.
"Credit Documents" means this Agreement, any Notes, the Fee Letter and all
other documents delivered to the Agent or any Bank in connection herewith.
"Default" means any Event of Default or any condition, occurrence or event
which, with notice or lapse of time or both, would, unless cured or waived,
constitute an Event of Default.
"Dollar" and the symbol "$" mean the lawful money of the United States.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate".
"Event of Default" means any of the events described in Section 7.1.
"Exchange Act" has the meaning specified in the definition of "Change in
Control".
I-4
<PAGE> 58
"Federal Funds Rate" means, for any day, the rate as quoted by the Federal
Reserve Bank of New York and confirmed in the weekly statistical release
designated as H.15(519), or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor "H.15(519)") on the
preceding Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as determined
by the Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each of three
leading brokers of Federal funds transactions in New York City selected by the
Agent.
"Federal Funds Rate Loan" means a Loan that bears interest based on the
Federal Funds Rate.
"Fee Letter" means the letter agreement referred to in Section 2.9.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on the last day of such twelve-month period; references to a Fiscal Year
with a number corresponding to any calendar year (e.g., the "1995 Fiscal Year")
refer to the Fiscal Year ending on July 31 during such calendar year.
"FRB" means the Board of Governors of the Federal Reserve System and any
Governmental Authority succeeding to any of its principal functions.
"GAAP" means United States generally accepted accounting principles.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing which exercise
a similar function.
"Indebtedness" of any Person means, without duplication, (i) any
obligation of such Person for borrowed money, including, without limitation (a)
any obligation of such Person evidenced by bonds, debentures, notes or other
similar debt instruments, and (b) any obligation for borrowed money which is
non-recourse to the credit of such Person but which is secured by a Lien on any
asset of such Person, (ii) any obligation of such Person on account of
advances, (iii) any obligation of such Person for the deferred purchase price
of any property or services, except Trade Accounts Payable, (iv) any obligation
of such Person as lessee under a Capitalized Lease, (v) all net obligations
with respect to Swap Contracts and (vi) any Indebtedness of another Person
secured by a Lien on any asset of such first
I-5
<PAGE> 59
Person, whether or not such Indebtedness is assumed by such first Person. For
all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer.
"Indemnified Liabilities" is defined in Section 9.5.
"Indemnified Persons" is defined in Section 9.5.
"Insolvency Proceeding" means, with respect to any Person, (a) any case,
action or proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors or (b) any general assignment for
the benefit of creditors, composition, marshalling of assets for creditors, or
other similar arrangement in respect of its creditors generally or any
substantial portion of its creditors, undertaken under U.S. Federal, state or
foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, as to any Loan other than a Federal Funds
Rate Loan, the last day of each Interest Period applicable to such Loan and, as
to any Federal Funds Rate Loan, the last Business Day of each calendar quarter.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Offshore Rate Loan
and ending on the date one day to 60 days thereafter as selected by the
Borrower in its Loan Request or Conversion/Continuation Notice,
provided that:
(i) if any Interest Period would otherwise end on a day that is not
a Business Day, that Interest Period shall be extended to the following
Business Day unless, in the case of an Offshore Rate Loan, the result of
such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the
preceding Business Day; and
(ii) no Interest Period for any Loan shall extend beyond the
Commitment Termination Date.
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Lending Office" means, as to any Bank, the office or offices of such Bank
specified as its "Lending Office" or "Domestic Lending Office" or "Offshore
Lending Office", as the
I-6
<PAGE> 60
case may be, on Schedule III hereto or in the case of an Assignee Bank, in the
Bank Assignment Agreement or such other office or offices as such Bank may from
time to time notify to the Borrower and the Agent.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, segregated asset
arrangement established in connection with reverse repurchase transactions,
encumbrance, lien (statutory or other), or preferential arrangement of any kind
or nature whatsoever in respect of any property (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease, any financing lease
having substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which such
lien relates as debtor, under the Uniform Commercial Code or any comparable
law) and any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease.
"Loan" means an extension of credit by a Bank to the Borrower under
Article II and may be a Federal Funds Rate Loan or an Offshore Rate Loan (each,
a "Type" of Loan).
"Loan Request" means a request for a Loan given by the Borrower to the
Agent, substantially in the form of Exhibit 2.3.
"Majority Banks" means, at any time, at least two Banks (which are not
Affiliates of each other) then holding at least 51% of the then aggregate
unpaid principal amount of the Loans or, if no such principal amount is then
outstanding, at least two Banks then having at least 51% of the Commitments.
"Material Adverse Change" means any change that is material and adverse to
(x) the condition (financial or otherwise) or business of the Borrower,
provided any change occurring after the most recent Borrowing Date resulting
from a decrease in the Net Asset Value of the Borrower shall not be deemed a
Material Adverse Change as long as the Borrower's Net Asset Value has not
decreased by more than 25% per share since the Borrowing Date, or (y) the
ability of the Borrower to duly and punctually pay and perform all or any of
its Obligations.
"Net Asset Value" means, at any date, Total Assets less Total Liabilities.
"Note" means the promissory note of the Borrower, substantially in the
form set forth as Exhibit 2.2.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower to the Banks and the Agent under the Credit Documents and the Fee
Letter, including (a) all
I-7
<PAGE> 61
obligations to make payments to the Banks of, and in respect of the principal
amount of and interest on, any Loan and (b) all obligations of the Borrower to
the Banks and the Agent in respect of fees, costs, expenses and indemnification
under Sections 9.4 and 9.5.
"Offshore Rate" means, for any Interest Period, with respect to Offshore
Rate Loans comprising part of the same Borrowing, the rate of interest per
annum (rounded upward to the next 1/100th of 1%) determined by the Agent as
follows:
Offshore Rate = IBOR
--------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means, for any day for any Interest
Period, the maximum reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day (whether
or not applicable to any Bank) under regulations issued from time to time
by the FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
"IBOR" means the rate of interest per annum determined by the Agent
as the rate at which Dollar deposits in the approximate amount of BofA's
Offshore Rate Loan for such Interest Period would be offered by BofA's
Grand Cayman Branch, Grand Cayman B.W.I. (or such other office as may be
designated for such purpose by BofA), to major banks in the offshore
Dollar interbank market at their request at approximately 9:00 a.m. (San
Francisco time) one Business Day prior to the commencement of such
Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore Rate
Loans then outstanding as of the effective date of any change in the Eurodollar
Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate.
"Organization Documents" means, for the Borrower, the Trust Agreement, the
bylaws, any certificate of determination or instrument relating to the rights
of preferred shareholders of the Borrower and all applicable resolutions of the
board of trustees (or any committee thereof) of the Borrower.
"Original Agreement" is defined in the first recital to this amended and
restated Agreement.
"Other Taxes" means any present or future stamp or documentary taxes or
any other
I-8
<PAGE> 62
excise or property taxes, charges or similar levies that arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Credit Documents.
"Participant" is defined in Section 9.7(b).
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Plan" means any "pension plan" or "welfare benefit plan" as such terms
are defined in ERISA.
"Pro Rata Share" means, as to any Bank (a) at any time there are no Loans
outstanding, the percentage equivalent (expressed as a decimal, rounded to the
ninth decimal place) at such time of such Bank's Commitment divided by
the combined Commitments of all Banks, as set forth on Schedule II, as such
amount may be adjusted from time to time as a result of an assignment made by
such Bank pursuant to Section 9.7, and (b) at any other time, the percentage
equivalent at such time of such Bank"s Loans divided by the combined Loans of
all the Banks.
"Refinancing" is defined in the second recital to this Agreement.
"Refinancing Date" means April 16, 1998.
"Regulation U" means the FRB's Regulation U.
"Related Party" means, with respect to the Borrower and for purposes of
Section 6.16 only, any Person (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, the Borrower, (ii) which beneficially owns or holds 5% or more of the
equity interest of the Borrower or (iii) 5% or more of the equity interest of
which is beneficially owned or held by the Borrower. The term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Replacement Bank" is defined in Section 3.7.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person
or any of its property or to which the Person or any of its property is
subject.
I-9
<PAGE> 63
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which more than 50% of the outstanding capital stock,
membership interests or other equity interests having ordinary voting power to
elect a majority of the board of directors (or other similar body) of such
entity (irrespective of whether at the time capital stock, membership interests
or other equity interests, of any other class or classes of such entity shall
or might have voting power upon the occurrence of any contingency) is at the
time directly or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other Subsidiaries of
such Person.
"Swap Contracts" means swap agreements (as such term is defined in Section
101 of the Bankruptcy Code) and any other agreements or arrangements designed
to provide protection against fluctuations in interest or currency exchange
rates or commodity prices.
"Target" has the meaning specified in the definition of "Change in
Control".
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, franchise taxes and such
taxes (including income taxes) as are imposed on or measured by each Bank's net
income by the jurisdiction (or any political subdivision thereof) under the
laws of which such Bank or the Agent, as the case may be, is organized or
maintains a lending office.
"Total Assets" means, with respect to the Borrower as of any date, the
aggregate amount of all items that would be set forth as assets on a balance
sheet of the Borrower on such date prepared in accordance with GAAP in effect
on such date. The assets of the Borrower shall be valued in accordance with
the Act, the rules and regulations under the Act, and the valuation procedures
set forth in its most recent statement of additional information. Upon the
written request of the Agent, the Borrower shall promptly furnish all such
information as the Agent shall reasonably request relating to the value of any
portfolio security or other asset of the Borrower or the assignment of values
thereto by the Borrower or any other Person.
"Total Liabilities" means, with respect to the Borrower as of any date,
the aggregate amount of all items that would be set forth as liabilities on a
balance sheet of the Borrower on such date prepared in accordance with GAAP in
effect on such date.
"Trade Accounts Payable" of any Person means trade accounts payable of
such Person with a maturity of not greater than 90 days incurred in the
ordinary course of such Person's business.
I-10
<PAGE> 64
"Trust Agreement" means, with respect to the Borrower, the Borrower's
Amended and Restated Agreement and Declaration of Trust dated September 19,
1989 as amended in accordance with the Agreement.
"Type" has the meaning specified in the definition of "Loan".
"United States" or "U.S." means the United States of America, its 50
States and the District of Columbia.
I-11
<PAGE> 65
SCHEDULE II
COMMITMENTS
AND PRO RATA SHARES
<TABLE>
<CAPTION>
Pro Rata
Bank Commitment Share
---- ------------ -------
<S> <C> <C>
Bank of America National Trust
and Savings Association $70,000,000 14.00%
The Bank of New York $60,000,000 12.00%
Commerzbank AG $60,000,000 12.00%
Fleet National Bank $60,000,000 12.00%
Bayerische Hypotheken-und
Wechsel-Bank Aktiengesellschaft $45,000,000 9.00%
Citibank, N.A. $45,000,000 9.00%
Credit Lyonnais $45,000,000 9.00%
Harris Trust and Savings Bank $45,000,000 9.00%
State Street Bank and
Trust Company $45,000,000 9.00%
Norwest Bank Minnesota, National
Association $25,000,000 5.00%
TOTAL $500,000,000 100.00%
</TABLE>
II-1
<PAGE> 66
SCHEDULE III
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
Notices:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
Address: One Parkview Plaza
Oakbrook Terrace, IL 60181
Facsimile No.: (630) 684-6587
Attention: John Sullivan
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
Payment Office:
Bank of America National Trust
and Savings Association
Agency Administration Services #5596
1850 Gateway Boulevard, 5th Floor
Concord, California 94520
Attention: Brian Graybill
Telephone: (925) 675-8414
Facsimile: (925) 675-8500
<PAGE> 67
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
Domestic and Offshore Lending Office:
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Lizet Flores
Telephone: (312) 828-6642
Facsimile: (312) 987-0889
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Bank of America National Trust and
Savings Association
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Lizet Flores
Telephone: (312) 828-6642
Facsimile: (312) 987-0889
THE BANK OF NEW YORK
Domestic and Offshore Lending Office:
One Wall Street, 1st Floor
Securities Industry Division
Main Floor
New York, NY 10286
Notices (other than Loan Requests and Notices of
Conversion/Continuation)
The Bank of New York
One Wall Street
Securities Industry Division
Main Floor
New York, NY 10286
Attention: Scott H. Buitekant
Telephone: (212) 635-6958
Facsimile: (212) 809-9575
III-2
<PAGE> 68
BAYERISCHE HYPOTHEKEN-UND WECHSEL-BANK AKTIENGESELLSCHAFT,
New York branch
Domestic and Offshore Lending Office:
Bayerische Hypotheken-Und Wechsel-Bank Aktiengesellschaft,
New York branch
32 Old Slip
32nd Floor
New York, NY 10005
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Bayerische Hypotheken-Und Wechsel-Bank Aktiengesellschaft,
New York branch
32 Old Slip
32nd Floor
New York, NY 10005
Attention: Thomas A. Lowe
Telephone: (212) 440-0743
Facsimile: (212) 440-0741
FLEET NATIONAL BANK
Domestic and Offshore Lending Office:
Fleet National Bank
777 Main Street
Hartford, Connecticut 06115
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Fleet National Bank
One Federal Street
Boston, MA 02211
Telephone: (617) 346-5814
Facsimile: (617) 346-5825
III-3
<PAGE> 69
STATE STREET BANK AND TRUST COMPANY
Domestic and Offshore Lending Office:
State Street Bank and Trust Company
225 Federal Street
Boston, MA 02110
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
State Street Bank and Trust Company
1776 Heritage Drive
4th Floor, North
North Quincy, MA 02171
Attention: Ned Siegel, A.V.P.
Telephone: (617) 985-5670
Facsimile: (617) 537-2663
CITIBANK, N.A.
Domestic and Offshore Lending Office:
Citibank, N.A.
12th Floor, Zone 11
399 Park Avenue
New York, NY 10043
Attention: Jervis Smith
Telephone: 212-559-1756
Facsimile: 212-371-6309
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Citibank, N.A.
12th Floor, Zone 11
399 Park Avenue
New York, NY 10043
Attention: Jervis Smith
Telephone: 212-559-1756
Facsimile: 212-371-6309
III-4
<PAGE> 70
COMMERZBANK AKTIENGESELLSCHAFT
Domestic and Offshore Lending Office:
Commerzbank Aktiengesellschaft
Two World Financial Center
New York, NY 10281-1050
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Commerzbank Aktiengesellschaft
Two World Financial Center
New York, NY 10281-1050
Attention: William M. Earley
Telephone: 212-266-7595
Facsimile: 212-266-7563
CREDIT LYONNAIS NEW YORK BRANCH
Domestic and Offshore Lending Office:
Credit Lyonnais
1301 Avenue of the Americas, 12th Floor
New York, NY 10019
Attention: Rosemarie DiCanto
Telephone: 212-261-7407
Facsimile: 212-261-3401
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Credit Lyonnais
1301 Avenue of the Americas, 12th Floor
New York, NY 10019
Attention: Rosemarie DiCanto
Telephone: 212-261-7407
Facsimile: 212-261-3401
III-5
<PAGE> 71
HARRIS TRUST AND SAVINGS BANK
Domestic and Offshore Lending Office:
Harris Trust and Savings Bank
111 West Monroe Street, 5th Floor East
Chicago, Illinois 60690
Attention: Scott Harris
Telephone: 312-461-2665
Facsimile: 312-765-8201
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Harris Trust and Savings Bank
111 West Monroe Street, 5th Floor East
Chicago, Illinois 60690
Attention: Scott Harris
Telephone: 312-461-2665
Facsimile: 312-765-8201
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Domestic and Offshore Lending Office:
Norwest Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, MN 55479-0105
Attention: Edward J. Meyer, Jr.
Telephone: 612-667-7375
Facsimile: 612-667-7251
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Norwest Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, MN 55479-0105
Attention: Edward J. Meyer, Jr.
Telephone: 612-667-7375
Facsimile: 612-667-7251
<PAGE> 72
EXHIBIT 2.2
Non-Negotiable
PROMISSORY NOTE
$___,000,000.00 as of _____ __, 199_
FOR VALUE RECEIVED, the undersigned ("Borrower") promises to pay to
_____________________ (the "Bank"), as set forth in the Credit Agreement
hereinafter referred to and on the Commitment Termination Date (as defined in
the Credit Agreement), the principal sum of ____________________ AND 00/100
DOLLARS ($___,000,000.00) or, if less, the then aggregate unpaid principal
amount of Federal Funds Rate Loans and Offshore Rate Loans (as such terms are
defined in the Credit Agreement) as has been borrowed by the Borrower under the
Credit Agreement. The Borrower may borrow, repay and reborrow hereunder in
accordance with the provisions of the Credit Agreement. All Federal Funds Rate
Loans and Offshore Rate Loans and all payments of principal shall be recorded
by the holder in its records.
Anything in this Note to the contrary notwithstanding, the Borrower shall
be liable hereunder only for Federal Funds Rate Loans and Offshore Rate Loans
borrowed by the Borrower under the Credit Agreement and other obligations with
respect thereto.
The Borrower further promises to pay to the order of the Bank interest on
the aggregate unpaid principal amount hereof from time to time outstanding from
the date hereof until paid in full at the rates per annum which shall be
determined in accordance with the provisions of the Credit Agreement. Accrued
interest shall be payable on the dates specified in the Credit Agreement.
All payments of principal and interest under this Note shall be made in
lawful money of the United States of America in immediately available funds at
Bank of America National Trust and Savings Association, ABA No. 1210-0035-8,
Account No. 12330-15453, Reference: Van Kampen American Capital Prime Rate
Income Trust, or at such other place as may be designated by the Agent to the
Borrower in writing.
This Note is the Note referred to in, and evidences indebtedness incurred
under, a Credit Agreement dated as of April 17, 1997 (herein, as it may be
amended, restated, modified or supplemented from time to time, called the
"Credit Agreement") among the
<PAGE> 73
Borrower, the other parties thereto and the Bank, to which Credit Agreement
reference is made for a statement of the terms and provisions thereof,
including those under which the Borrower is permitted and required to
make prepayments and repayments of principal of such indebtedness and under
which such indebtedness may be declared to be immediately due and payable.
All parties hereto, whether as makers, endorsers or otherwise, severally
waive presentment, demand, protest and notice of dishonor in connection with
this Note.
THIS NOTE IS MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS.
VAN KAMPEN AMERICAN CAPITAL
PRIME INCOME TRUST
By: _____________________________
Title: __________________________
<PAGE> 74
LOANS AND PRINCIPAL PAYMENTS
- --------------------------------------------------------------------------------
Amount of Unpaid
Amount of Principal Principal Notation
Date Loan Made Repaid Balance Total Made By
- ----- --------- --------- --------- ----- --------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 75
EXHIBIT 2.3
FORM OF LOAN REQUEST
Reference is made to that certain Credit Agreement, dated as of April
17,1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among Van Kampen American Capital Prime Rate
Income Trust ("Borrower"), various financial institutions party thereto and
Bank of America National Trust and Savings Association (the "Banks").
Capitalized terms used herein and not otherwise defined shall have the meanings
given to such terms in the Credit Agreement. Pursuant to the terms of the
Credit Agreement, the undersigned, on behalf of and with respect to the
Borrower, hereby represents and certifies to the Agent and the Banks as
follows:
1. On _______________, the Borrower, on behalf of the Borrower, requested
that the Banks make a [Type of Loan] in the principal amount of $___________to
be made on _____________ and having a tenor of ____________________.
2. The purpose for which such Loan will be used is
__________________________.
3. As of ____________________1/, (i) the Asset Coverage Ratio of the
Borrower was as set forth in subparagraph (e) below and (ii) the Borrowing Base
of the Borrower was as set forth in subparagraph (f) below, calculated as
follows:
(a) Net Asset Value plus proposed
Loan ______________
(b) minus (without duplication)
value of Assets subject
to Liens (including, without
limitation, margin and asset
allocation arrangements) ______________
(c) Adjusted Net Asset Value
((a) minus (b)) ______________
1/Use immediately preceding Business Day.
<PAGE> 76
(d) Indebtedness (including proposed
Loan) ______________
(e) Asset Coverage Ratio ((c) divided
by (d)) ______________
(f) Borrowing Base ((c) times __%) ______________
5. The undersigned further certifies, on behalf of the Borrower, that to
the best of its knowledge, no Default has occurred and is continuing as of the
date of this Borrowing Certificate.
6. The undersigned further certifies, on behalf of the Borrower, that,
with respect to the Borrower, there has not been outstanding as of the close of
business (San Francisco time) on the day preceding the proposed Borrowing Date
for the requested Loan a Loan that had been outstanding for more than sixty
(60) days.
Date: ____________________ Van Kampen American Capital Prime Rate Income
Trust
By: _____________________
Title:
2
<PAGE> 77
EXHIBIT 2.4
NOTICE OF CONVERSION/CONTINUATION
Date: ____________, 199__
To: Bank of America National Trust and Savings Association, as Agent for the
Banks party to the Credit Agreement dated as of April 17, 1997 (as
amended, restated, supplemented or otherwise modified from time to time,
the "Credit Agreement") among Van Kampen American Capital Prime Rate
Income Trust, certain financial institutions party thereto and Bank of
America National Trust and Savings Association, as Agent
Ladies and Gentlemen:
The undersigned, Van Kampen American Capital Prime Rate Income Trust (the
"Borrower"), refers to the Credit Agreement, the terms defined therein being
used herein as therein defined, and hereby gives you notice irrevocably,
pursuant to Section 2.4 of the Credit Agreement, of the [conversion]
[continuation] of the Loans specified herein, that:
1. The Conversion/Continuation Date is ________, 19__.
2. The aggregate amount of the Loans to be [converted] [continued] is
$_______.
3. The Loans are to be [converted into] [continued as] [Federal Funds
Rate] [Offshore Rate] Loans.
4. [If applicable:] The duration of the Interest Period for the Loans
included in the [conversion] [continuation] shall be ____ days.
The undersigned hereby certifies that no Default has occurred and is
continuing or would result from such proposed [conversion] [continuation].
Van Kampen American Capital
Prime Income Trust
By: ____________________
Title:
<PAGE> 78
EXHIBIT 4.1(c)-1
FORM OF OPINION OF COUNSEL TO THE BORROWER
<PAGE> 79
EXHIBIT 4.1(c)-2
FORM OF OPINION OF COUNSEL TO THE AGENT
<PAGE> 80
EXHIBIT 5.7-1
SCHEDULE OF LITIGATION
NONE
<PAGE> 81
EXHIBIT 5.7-2
SCHEDULE OF CONTINGENT LIABILITIES
NONE
<PAGE> 82
EXHIBIT 6.1
FORM OF BORROWING BASE CERTIFICATE
Reference is made to that certain Credit Agreement, dated as of April 17,
1997 (as amended, restated, supplemented or otherwise modified from time to
time the "Credit Agreement"), among Van Kampen American Capital Prime Rate
Income Trust ("Borrower"), various financial institutions party thereto and
Bank of America National Trust and Savings Association, as Agent. Capitalized
terms used herein and not otherwise defined shall have the meanings given to
such terms in the Credit Agreement.
Pursuant to the terms of the Credit Agreement, the undersigned, on behalf
of and with respect to the Borrower, hereby represents and certifies to the
Agent and the Banks that as of __________ __, 199_, (i) the Borrowing Base of
the Borrower was the amount shown in subparagraph (e) below and (ii) the Asset
Coverage Ratio was the ratio set forth in subparagraph (f) below, each
calculated as follows:
(a) Net Asset Value ______________
(b) minus (without duplication)
value of Assets subject
to Liens (including, without
limitation, margin and asset
allocation arrangements) ______________
(c) Adjusted Net Asset Value
((a) minus (b)) ______________
(d) Indebtedness ______________
(e) Borrowing Base ((c) times 12.5%) ______________
(f) Asset Coverage Ratio ((c) divided
by (d)) ______________
Date: ____________________ Van Kampen American Capital
Prime Income Trust
By:________________________
Title:_____________________
